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bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 4195
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With the new Automatic Exchange of Information rules I have

Customer Question

HiWith the new Automatic Exchange of Information rules I have the following questions; I am a UK national and resident in the UK, however 90% of all my work is from overseas travel (I don't think I'm out of the UK long enough to be classed as on overseas worker tho).1) I have an offshore currency account in Switzerland and an offshore Ltd company that I use for work that I do when I'm abroad for my non UK clients. This was set up at the end of 2014. Non of the money generated from this was generated in the UK, any UK clients are invoices directly via a subcontractor umbrella company.2) I use my offshore account as a holding account and bring money from it into the UK to do two things . A. To pay myself I invoice my company through a UK subcontractors umbrella company. They issue me with a payslip, tax me and do my employer and employee NI payments. B) to pay off my credit card bill that I use for all company purchases and expenses.3) In the last 2 months I have used offshore funds to set up a new UK business (current as a sole trader, but I'm yet to register myself as self employed (but will do imminently). I'm doing this believing that funds used are a directors loan.4) I am not currently registered in the UK as a director or self employed during the period I have had an offshore Ltd company, as all my pay and tax is being paid via the subcontractor umbrella company.5) I have never paid myself any dividends from the offshore company.So now that I have been told by my offshore bank that they will be informing the UK tax man of my account turnover and balance as part of their Automatic Exchange of Information commitments and having done some googling, I'm now worried that by trying to make my business life low maintenance I have inadvertently done something wrong? And if I have, how do I fix it? I set myself up this way to reduce the admin burden on myself and so that I could receive proper payslips. I have poor credit in the UK so I find opening UK bank accounts difficult, especially currency ones for international clients.So in Summary; I have been paying UK tax on my income from the overseas business that goes into my UK current account. I have not paid myself any dividends but have used company funds to pay for the set up of a new UK based business. 2014/15 the company made a small profit, 2015/16 again a profit was made, but I've not paid any company tax as this is not a requirement for the jurisdiction where the company was incorporated.
Submitted: 1 year ago.
Category: UK Tax
Expert:  bigduckontax replied 1 year ago.

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

If you spend more than 183 days in the UK in any one tax year then you are liable to UK taxation on your world wide income. Thus any profits made through the Swiss banking arrangements should be declared on your annual self assessment tax return. If no profits are made then there is, of course, nothing to report. On registration for self employment you will automatically sent a tax return form annually. You may, of course, be being sent one anyway.

I would suggest that you register for self employment as quickly as possible.

Please come back to me if you have any follow up questions.

I do hope that you have found my reply of assistance.