UK Ltd. yearly cost breakdown

[Fothermucker]

I'm aware 19% is not the lowest tax but it's much lower than where I live.

On top of that UK Ltd's are easy to start and setup costs are very low.

What are the yearly costs of running a UK Ltd? Accountants, fees, form filing ...etc..

 

[Sols]

If you do everything by yourself, it's 13 GBP per year for the filing. You will need a UK address for the company, which can be had for a few hundred GBP per year.

If you outsource it to an accounting firm, it depends on volume (number of transactions). Can be anywhere from a few hundred to several thousand GBP. Best to ask around for quotes.

Before you start, take some time to read into how tax residence and double taxation might apply where you live. There is a high risk that the UK company is considered tax resident in your home country and unless there is a double taxation treaty between the two countries, you risk paying double tax. If there is a double tax treaty, you would normally pay 19% in the UK and the rest in your home country.

 

[Roamer]

Honestly, it's not that much.

1. £13 – yearly confirmation statement filing
2. £200 – registered address for a year
3. £2,000 – accountant to file your CT (can be 1k, or 5k...)

The #3 is optional as you can do it yourself via the amazing GOV.UK website, it really depends on how straightforward or complex your affairs are. If you are liable for VAT, add a little more to #3.

 

[Spinat]

Speak with @James Turner he can handle everything you need for your company i.e. accounting, tax filing, secretary etc and they have reasonable fees.

 

[topleaders]

I'm aware 19% is not the lowest tax but it's much lower than where I live.

On top of that UK Ltd's are easy to start and setup costs are very low.

What are the yearly costs of running a UK Ltd? Accountants, fees, form filing ...etc..

19% tax rate is only in your dreams, you better think around 60% of taxes whan you take all in consideration.

It's a joke, I don't know how any sane person in the earth will want to incorporate in UK

 

[Roamer]

19% tax rate is only in your dreams, you better think around 60% of taxes whan you take all in consideration.

It's a joke, I don't know how any sane person in the earth will want to incorporate in UK

Exactly. As a owner-managed LTD in the UK, it's a bloody joke. 19% CT, then losing my personal allowance and taxed on salary + dividends.

Time to move elsewhere. It's just too much.

 

[Spinat]

If you don't live in the UK it's the 19% applicable and the tax you have to pay at home country.

 

[Fothermucker]

Thanx everyone for all the info!

I'm an EU citizen living in Germany. Since I don't plan to stay here forever, my intention is to keep all the profits in the company and cashout
once I'm someplace with lower personal income tax.

I'll google uk accounting services, shoot out some emails, see what gives.

Maybe I could even do it myself. Which forms need to be filed annually?
Can anyone recommend any good books/pdfs on the subject of running a UK Ltd?

 

[JimBeam]

Depending on what you do you might consider also Estonia, it's 20% tax on distribution.
So no taxes to be paid at the end of the year but once you want to withdraw - pay out dividends.
Most of the things can be done online (setup, accounting etc).

 

[Fothermucker]

Depending on what you do you might consider also Estonia, it's 20% tax on distribution.
So no taxes to be paid at the end of the year but once you want to withdraw - pay out dividends.
Most of the things can be done online (setup, accounting etc).

Just looking for a cheap setup to start dropshipping.

Was thinking about a US LLC at first but waiting times for EIN are like 3-4 months.

As far as I know Estonia doesn't allow dropshipping...

 

[Don]

I think you are referring to Estonian service providers not accepting dropshipping businesses.
It is definitely possible to open a dropshipping business in Estonia, just need to find the right service provider.
In all cases, you need to have a properly structured business to mitigate tax risks in Germany.

 

[JohnLocke]

It is definitely possible to open a dropshipping business in Estonia, just need to find the right service provider.

any suggestion on where to go?

 

[Don]

any suggestion on where to go?

Hi!
Well, I can recommend myself or IBCCS TAX. We have offices in 5 jurisdictions (+ soon in Ukraine).
I think it's starting to make more sense to use Estonia as a location for a dropshipping business now after Brexit and with the new EU regulations for VAT.
By the way, if you are importing from China you might also want to look into Georgia, which has free trade agreements with both the EU and China.

 

[fshore]

Hi!
Well, I can recommend myself or IBCCS TAX. We have offices in 5 jurisdictions (+ soon in Ukraine).
I think it's starting to make more sense to use Estonia as a location for a dropshipping business now after Brexit and with the new EU regulations for VAT.
By the way, if you are importing from China you might also want to look into Georgia, which has free trade agreements with both the EU and China.

How would it be beneficial to use an Estonian company for dropshipping regarding the upcoming EU laws? Wouldn't a UK company or other company with vat registration in the EU work the same as an Estonian company with vat registration?

 

[Don]

Businesses registered for VAT in multiple jurisdictions will no longer be required to retain these multiple VAT registrations and instead can opt for the OSS regime, so if you sell mainly to the EU, it might be easier to use Estonia instead of registering your UK company for VAT in EU.

 

[Fothermucker]

Yes indeed I was refering to estonian formation providers, once one mentions dropshipping they stop replying to your emails..

To be honest I never seriously looked into Estonia but dropshipping to EU instead of a single UK market is definitely more interesting.

 

[fshore]

Businesses registered for VAT in multiple jurisdictions will no longer be required to retain these multiple VAT registrations and instead can opt for the OSS regime, so if you sell mainly to the EU, it might be easier to use Estonia instead of registering your UK company for VAT in EU.

Yes, but in both cases you would need to be registered in one EU country. So what is the benefit of an Estonian company over a UK company?

 

[Don]

Yes, but in both cases you would need to be registered in one EU country. So what is the benefit of an Estonian company over a UK company?

Estonia does not tax realized profits. Instead, only distributed profits are taxed. In practice, this means that any money that stays in the company is exempt while any profits distributed or deemed distributed are taxed at a flat rate of 20%.

 

[fshore]

Estonia does not tax realized profits. Instead, only distributed profits are taxed. In practice, this means that any money that stays in the company is exempt while any profits distributed or deemed distributed are taxed at a flat rate of 20%.

Yes, but I was referring to VAT treatment, as you said Estonia would be more beneficial after Brexit and the new EU VAT rules. So, would there be any difference in VAT treatment?
I assume if you ship from Estonia you could benefit from the registration threshold up to 10K, but if you for example use FBA or need to register in another country then there would still be one country where you register for VAT in both cases.

 

[Don]

Correct.