UK Reseller/Redistributor |digital products Stripe|Tax UK?

[wellington]

We've (the company) been working on 'making our technologies' into 'products' for end users outside of the scope of bespoke offerings and internal uses.

We've packaged our tech for Retail, Commercial, State.

We don't really want to go through the rig-ma-roll of establishing banking for this business and dealing with the regulations (AI) however an former employee who used to work for the companies, suggested that we route these new products through a payment company in the UK.

They'd establish a company purely for processing payments (stripe) the end user would be placing their orders/payment collected, the payments routed (on-screen) to the UK company stripe account the orders would be processed (digital) through the BVI company, the BVI company wouldn't enter into a purchase agreement with the end-user but the UK company would, their order will complete.

Issue is two issues.

1) Will stripe work with this sort of set up where a UK company has an agreement to take money for orders which are then processed by the BVI company (or other) at the end of the quarter the UK company will provide revenues to the BVI company minus its commissions?

2) Its basically digital redistribution or reselling.

BVI company can't have touch points with the UK for tax reasons (could bring entire company on-shore due to management touch points).

Should add Co is entirely automated (no human management).

 

[yngmind]

1 - You don't have to disclose it, so it will
2 - They can fk you if you have customers in the UK, do you?

Do you have a bank account for the BVI company already?

 

[wellington]

1 - You don't have to disclose it, so it will
2 - They can fk you if you have customers in the UK, do you?

2) We won't have customers in the UK -> hence pushing for this approach as the company itself is in the AI field and doesn't want to follow UK AI regulations when they come in, having said that it's technology has just spent two years being packaged for a host of product/services for consumer/commercial/state use (outside of bespoke) and the UK is the viable place to have a business payment mechanism.

But indirectly via servicing a UK based company (is the intent) payments route (on-screen) ideally via Stripe to that company but the end user won't have / shouldn't have to go to a alternative site/business to place orders -> the app/site would host the payment mechanism which is where the questions arise.

Alternative is to clone the UX into a UK vehicle on license for them (but that's a considerable amount of work).

Do you have a bank account for the BVI company already?

Yes BVI company in good standing etc, no issues on that front... Only issue is future UK AI regulations so its likely going to be closed/move next month -> into next year.

 

[yngmind]

2) We won't have customers in the UK -> hence pushing for this approach as the company itself is in the AI field and doesn't want to follow UK AI regulations when they come in, having said that it's technology has just spent two years being packaged for a host of product/services for consumer/commercial/state use (outside of bespoke) and the UK is the viable place to have a business payment mechanism.

But indirectly via servicing a UK based company (is the intent) payments route (on-screen) ideally via Stripe to that company but the end user won't have / shouldn't have to go to a alternative site/business to place orders -> the app/site would host the payment mechanism which is where the questions arise.

Alternative is to clone the UX into a UK vehicle on license for them (but that's a considerable amount of work).


Yes BVI company in good standing etc, no issues on that front... Only issue is future UK AI regulations so its likely going to be closed/move next month -> into next year.

I don't see any problems. It will work.

But I would open a company in the country where you would have most customers just because of the processing.

You will have a better acceptance rate with the US company for the US customers.

UK is highly inefficient. Running a UK company and dealing with HMRC is a big hassle.

 

[wellington]

But I would open a company in the country where you would have most customers just because of the processing.

Ah probably wasn't clear, this is a 'new product array', we've kinda packaged some of our quant system into products/services for mainstream use *its a multi-agent AI system*.

So that side of the business will remain unaffected, this new one is to see if we can take some of the market share now AI has become sexy for main-street/wall-street (outside of internal tools).

It's fully automated and last thing we want to do is get tied down over it compared to the other-side of the business.

I am adverse to the US... for a number of reasons... they'd want to do from the UK as they are based there.

 

[yngmind]

Ah probably wasn't clear, this is a 'new product array', we've kinda packaged some of our quant system into products/services for mainstream use *its a multi-agent AI system*.

So that side of the business will remain unaffected, this new one is to see if we can take some of the market share now AI has become sexy for main-street/wall-street (outside of internal tools).

It's fully automated and last thing we want to do is get tied down over it compared to the other-side of the business.

I am adverse to the US... for a number of reasons... they'd want to do from the UK as they are based there.

Then just work through a UK company, and be prepared to deal with one of the most inefficient tax authorities on the planet Earth

 

[wellington]

Then just work through a UK company, and be prepared to deal with one of the most inefficient tax authorities on the planet Earth

If A) BVI company -> is accepting orders which are paid to B) UK Company -> i'm not sure how the UK has any input in it.

B) UK company then pays A company (BVI) every quarter minus its commissions.

BVI company merely has a portal users engage with but doesn't accept money... funds...

Completely different companies with different management....

Perhaps not clear, i don't see where HMRC would be able to get claws in.

 

[yngmind]

If A) BVI company -> is accepting orders which are paid to B) UK Company -> i'm not sure how the UK has any input in it.

B) UK company then pays A company (BVI) every quarter minus its commissions.

BVI company merely has a portal users engage with but doesn't accept money... funds...

Completely different companies with different management....

Perhaps not clear, i don't see where HMRC would be able to get claws in.

Just create a good agreement with a lawyer. You should be fine.

They won't even ask any questions. Your bank can ask you questions, like where you are sending the money to the BVI.


At some point, you will have to deal with the HMRC, at least for the self-assessment returns.


Lol, btw, Biden actually wants to regulate AI, I think you're aware.

 

[wellington]

Just create a good agreement with a lawyer. You should be fine.

They won't even ask any questions. Your bank can ask you questions, like where you are sending the money to the BVI.


At some point, you will have to deal with the HMRC, at least for the self-assessment returns.


Lol, btw, Biden actually wants to regulate AI, I think you're aware.

No, I shouldn't have to deal with HMRC, nor should the company.

I'm not entirely sure we are on the same page....

A Overseas company that has an agreement with a UK company that sells its products doesn't have to file returns or engage with HMRC in any capacity.

It's not domestic to the UK, in addition the company isn't either and nor it's owners/staff/employees/vendors etc.

That's like saying a Kenyan farmer has to speak to HMRC because Tesco sells his fruit lol

Perhaps not clear, i don't see where HMRC would be able to get claws in.

Yes, hence the company is re-shoring and having directors in Asia, under Asian laws in the future.

My part comes to an end on the conclusion of all this -> become a passive shareholder at that point. (non resident UK citizen).

 

[yngmind]

No, I shouldn't have to deal with HMRC, nor should the company.

I'm not entirely sure we are on the same page....

A Overseas company that has an agreement with a UK company that sells its products doesn't have to file returns or engage with HMRC in any capacity.

It's not domestic to the UK, in addition the company isn't either and nor it's owners/staff/employees/vendors etc.

That's like saying a Kenyan farmer has to speak to HMRC because Tesco sells his fruit lol


Yes, hence the company is re-shoring and having directors in Asia, under Asian laws in the future.

My part comes to an end on the conclusion of all this -> become a passive shareholder at that point. (non resident UK citizen).

Yeah, but you have to prove to them that you don't have to file self-assessment returns, and you don't have UK customers.

But by default, you have to.

Plus UK company will make commissions, so you probably will have to.

https://imgur.com/a/2T68imq

 

[wellington]

Yeah, but you have to prove to them that you don't have to file self-assessment returns, and you don't have UK customers.

But by default, you have to.

Plus UK company will make commissions, so you probably will have to.

https://imgur.com/a/2T68imq

I don't live in the UK, the other Shareholders don't either.

You don't file in a country you are not resident with just because a business you have shareholdings in may in the future do business with a business in the UK lol.

 

[yngmind]

I don't live in the UK, the other Shareholders don't either.

You don't file in a country you are not resident with just because a business you have shareholdings in may in the future do business with a business in the UK lol.

Yes, you absolutely do lol

https://www.gov.uk/tax-uk-income-live-abroad

 

[wellington]

Ergo a BVI company with 0 footprint in the UK shouldn't have to have its directors file in the UK just because it will service another company which will utilise its products/services and sell them to end users in the UK/EU.

That's preposterous.

Yeah, but you have to prove to them that you don't have to file self-assessment returns, and you don't have UK customers.

But by default, you have to.

Plus UK company will make commissions, so you probably will have to.

https://imgur.com/a/2T68imq

That's not relevant.

You must file tax returns with HM Revenue and Customs (HMRC) if your company is incorporated outside the UK but you have a base in the UK. You may need to file annual accounts with Companies House.

- This is also not relevant as the company wouldn't have a 'base' in the UK.

 

[yngmind]

Ergo a BVI company with 0 footprint in the UK shouldn't have to have its directors file in the UK just because it will service another company which will utilise its products/services and sell them to end users in the UK/EU.

That's preposterous.

I own a UK LLP, and I'm not a resident of the UK. I don't live there and have never been to the UK.

But I have to file self assessment returns, I'm trying to convince them that I don't have to file them, but I keep receiving fines from them.

 

[wellington]

Yes, you absolutely do lol

https://www.gov.uk/tax-uk-income-live-abroad

That's specific to 'humans' not entities.

UK Citizens do not provide information to the UK HMRC when non resident and have no assets in the UK which they can earn income off.

I am 15 yrs non-resident, and hold zero assets in the UK.

A company that i own holdings in if it sell products to a UK company which resells/distributes to end users in the UK/EU, wouldn't result in me personally having a footprint in the UK, nor the BVI company i hold shares in.

 

[yngmind]

That's specific to 'humans' not entities.

UK Citizens do not provide information to the UK HMRC when non resident and have no assets in the UK which they can earn income off.

I am 15 yrs non-resident, and hold zero assets in the UK.

A company that i own holdings in if it sell products to a UK company which resells/distributes to end users in the UK/EU, wouldn't result in me personally having a footprint in the UK, nor the BVI company i hold shares in.

The directors of the company will have to file the self-assessment returns if you don't provide to the HMRC that you don't have to.

If you don't believe me, contact HMRC

 

[wellington]

I own a UK LLP, and I'm not a resident of the UK. I don't live there and have never been to the UK.

But I have to file self assessment returns, I'm trying to convince them that I don't have to file them, but I keep receiving fines from them.

That's your own specific issue...

I can't get into that, i am absolutely certain on the BVI front i don't have to do anything in the UK, and on the personal front as one of my oldest friends (RIP) worked for HMRC and discussed all this with me a decade ago.

Selling products/services to a company in the UK which then sells to UK/EU doesn't bring a overseas company into the Tax orbit of the UK/EU (except potentially VAT now), and certainly doesn't bring me into the orbit of the UK.

That's just not how the UK tax system works.

The directors of the company will have to file the self-assessment returns if you don't provide to the HMRC that you don't have to.

One minute, i'm just talking to the banana guy in Kenya, about his need to register and file with HMRC because his banana company sells to Tesco and they sell to end consumers.

 

[Dandyline]

It’s a common setup, everything from Curacao based casinos to VPN providers have similar setups.

Not sure about the VAT part though, if the UK company need to pay VAT on the full amount or only the commission.

 

[wellington]

The directors of the company will have to file the self-assessment returns if you don't provide to the HMRC that you don't have to.

If you don't believe me, contact HMRC

Just realised where you are coming from, ok, your company is a LLP which is an extension of yourself, so yes you need to deal with HMRC.

Company i am referring to is a BVI company with substance and no connections to the UK except one of its shareholders is British non-resident (15+ yrs).

Completely different things... you have to, we wouldn't.

 

[yngmind]

Just realised where you are coming from, ok, your company is a LLP which is an extension of yourself, so yes you need to deal with HMRC.

Company i am referring to is a BVI company with substance and no connections to the UK except one of its shareholders is British non-resident (15+ yrs).

Completely different things... you have to, we wouldn't.

Once you open a company, you immediately receive a letter from HMRC with your UTR number saying that you need to file tax returns.