Is UK Ltd good for paying non-residents employees?

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Andy Dufresne

New member
Hi guys,

I am currently a tax resident in the EU and have full-time employment, but my side project has started to make around 10K EUR per month. I am hiring a few low-cost non-eu employees to do the daily operations for me.

Since the business is growing I'm planning on creating a UK LTD as a non-resident and to start using some payment service providers such as Stripe or paypal.

1- I am curious whether I can pay out the salaries without paying any income tax in the UK as all the employees will be non-residents. For instance, if I have an employment contract let's say netto 1000 EUR/month. Can I pay out 1000 EUR without any deductions in the UK?

2- Most of my customers are from Africa and Asia, and I am selling an online service. Can my sales be VAT exempt in the UK?

3- Can you please recommend some accountants that you have used, relevant to my budget?

Cheers,
 

Sols

Staff member
Mentor Group Gold
Do yourself a favor and don't have non-resident employees. Have them as service providers. Then you just have an agreement with them where they invoice you 1,000 EUR/month and that's the entire amount you pay. No payroll taxes, social security contributions, and other headaches to worry about. You might not be required to pay payroll taxes and such for non-resident employees, but just save yourself the pain of having to file paperwork even if all you do is fill in zeros.

Sales to customers in Africa and Asia would probably not be subject to VAT but check with a legal adviser. Not all businesses are the same and there might be something about yours that adds VAT or other duties.
 

lavel

Offshore Agent
Mentor Group Gold
how will you take out the money every month and pay you local taxes?
 

bilderberger

New member
You can have non-residents on the payroll;

For national insurance you just use X as their NI tax code and your accountant does not need to pay either employer NI or deduct employee NI from wages.

For income tax you need the employee to fill out a P85 form and write to HMRC who will issue an NT tax code for that person if they fall under a double taxation treaty. If not I think they still might have to pay income tax.

But as others have said. Why bother with employees since they will still have to pay income tax in their own jurisdiction. You may as well have them as contractors and still pay them gross via invoice but without having to keep any payroll books.
 

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