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bigduckontax
bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 2989
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I am a resident in Brasil ( where I pay my taxes). I would

Customer Question

Hi,
I am a resident in Brasil ( where I pay my taxes).
I would like to start a LTD company in the UK.
I'll be the director and have 100% of the shares.
I'll be paying myself a salary as a director.
My question is:
As a UK company which is paying a salary to a director who is resident in Brasil. Where and how much are the taxes paid on the salary?
For example, I pay myself 1000 GBP each month as a salary. Do I have to pay social security taxes in the UK?
I know that a brasilian company that pays a salaray to a brazilian resident has to pay 28.8% of social security taxes and then the employee pays 11% of his gross salary. Then on top of that, the employee has to pay 27% of taxes on his salary.
So if I pay a salary from my UK company to myself, what would be the taxes I'll have to pay(and where)?
Thank you for you answer
Submitted: 11 months ago.
Category: UK Tax
Expert:  bigduckontax replied 11 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

An UK limited company must have a Registered Office in the UK and maintain its Company Register there for inspection by the public if needed. There is no requirement for shareholders and directors to be UK citizens or even to reside in the UK. You will have to make an Annual Return on line. However, directors are deemed to be employees per se and must be remunerated through PAYE channels with Income Tax (IT) and National Insurance (NI) deducted.

As a non resident HMRC may well allocate you a tax code which will preclude any IT being deducted, but at your proposed level of salary there will be NI deductions as follows:

'£155 to £815 a week (£672 to £3,532 a month) - 12%

Over £815 a week (£3,532 a month) - 2%

say GBP 83 per month.

You will have to request a NI Number from the UK's Department for Work and Pensions. You can read all about NI here:

https://www.gov.uk/national-insurance/how-much-you-pay

The company is also responsible for paying the employer's element of NI. These deductions are done through the PAYE system.

The company will have to register with HMRC to enroll in the PAYE system. This is how to do it:

https://www.gov.uk/register-employer

Once registered you make monthly returns and payments through the RTI system on line and also make an end of the tax year (6 April - 5 April) return.

There are many organisations which will do this compliance work for your company, but at a price of course.

I do hope that I have shed some light on the UK systems for you.

Customer: replied 11 months ago.
Hi, thank you for you answer.
I understood that as a director from a UK company, I'll have to pay my taxes in UK even if I am not resident in UK.
What if I pay myself a salary of 10 000 GBP per months, then I'll be subjected to IT in the UK?
My maain worry is if I'll have to pay taxes again when I 'll receive this money in Brasil (where I am resident), will I have to pay IT in brazil from this money (that was already taxed in the Uk?)
Thank you for your time
Expert:  bigduckontax replied 11 months ago.

As I told you the UK tax organization HMRC may well issue you with a tax code which will require the company not to deduct IT. If you paid yourself 10K per month you would still be liable to UK taxation, but see my previous sentence.

There is a Double Taxation Treaty in force between the UK and Brazil which precludes the same income stream being taxed in both jurisdictions. If UK IT is deducted than it is allowed as a tax credit against any Brazilian taxation on the same income. The Treaty does not, however, protect you from differences in rates of taxation.

Please be so kind as to rate me before you leave the Just Answer site.

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