UK Ltd. company and UK residence - Tax optimisation

[Matamanner]

Hello,

I am trying to optimise my business and reduce the tax burden as much as possible. Your help would be most appreciated.

My company is registered in the UK and I have a UK residence. My company is selling online services and digital products and it's trading for just shy of £85,000 a year. At the moment is not VAT registered, but I plan to expand and increase turnover for next year, so I will need to register for VAT soon. My company has high margins, therefore taxes are painful even at 19% (they always are, aren't they?).

I live in the UK and recently bought a house. I am not planning to move out from the UK at the moment. I can consider that in 2-3 years if my personal situation changes. I know this highly reduces tax optimisation at the moment.

Therefore, I am trying to optimise this situation, knowing that I won't be able to reduce my tax liabilities completely, but trying to get as much money out as possible from my business without ending up paying loads of taxes. I am happy to setup offshore companies, holding companies and any sustainable structure. There is a lot of noise online, and couldn't really figure out what is the most efficient way to do it.

A couple of questions below then, as your help is much appreciated:

• What are the best options available from your experience?
• Is there a way to avoid VAT, maybe using an offshore setup?

Hope this makes sense.

Thanks!

 

[Sols]

My company is registered in the UK and I have a UK residence. My company is selling online services and digital products and it's trading for just shy of £85,000 a year. At the moment is not VAT registered, but I plan to expand and increase turnover for next year, so I will need to register for VAT soon. My company has high margins, therefore taxes are painful even at 19% (they always are, aren't they?).

In my experience working with many different kind of businesses, if VAT is hurting a business' bottom line, there is something else wrong in the setup, supply chain, or delivery channels.

• What are the best options available from your experience?

Face the music. Work with a good UK accountant to make the most out of available deductions, incentives, tax breaks, et cetera.

• Is there a way to avoid VAT, maybe using an offshore setup?

Legally? No.
Illegally? Yes.
Will it work? Yes, until it doesn't. And then you're going to wish you had done it legally from the start.

 

[Barney2201]

Sols is 100% correct, I started making good money as a UK resident and UK resident company, looked at all the options and the only real option was to leave the UK... It all comes down to if the tax saving is worth it and if you can leave (family tie, children etc). Been gone 5 years and to be honest never looked back. I still operate in the UK and pay an element of corp tax but my overall tax has been slashed....

 

[Matamanner]

Thanks Sols and Barney, this is really helpful and much appreciated.

I will follow your suggestions and face the music, as you said. I will have a think on whether to expedite the process of moving out of the country if the turnover increases a lot and the tax burden becomes too heavy.

@Sols - you mentioned a good UK accountant. I have never really found one to be honest (probably haven't searched enough). Do you have any recommendation or any link I can visit to see a few? I am in London at the moment but really all the accounting can be done remotely. @Barney2201, happy to hear about your recommendations if you have any.

Thanks very much