Question Where would be my best option?

[EdMonk]

Hi.

I could really do with some guidance here, please.

I am a UK resident and plan to sell my product via the internet.

My market research indicates that most of my sales will come from the US, UK, EU, Australia and Canada. I have locally sourced manufacturing in these countries for about 50% of my product, the other 50% will be produced in the USA and shipped worldwide.
Estimated sales by region:

• USA 45%
• UK 30%
• EU 17%
• Australia & Canada 5%

I want to minimise my UK corporation tax so I am thinking about an offshore company. Said company has no employees as all my manufacturing is sub-contracted out.

My question is. Where would I be best locating my operation to minimise my tax liabilities?

I appreciate any help offered here

Thank you

 

[Sols]

As long as you continue living in the UK, any company that you control becomes UK tax resident. You'll need to pack your bags and relocate somewhere with a more favorable tax regime if you actually want to save on taxes in a legal and sustainable way. It's either that or set up a company offshore, hire people there, and establish a proper economic substance so that you can demonstrate to the HMRC that the company isn't under you day to day control.

 

[CyprusLawyer101]

If you ditch your UK sales part of your business, you could set up offshore and avoid the Uk CFC charge.

 

[EdMonk]

Thank you both. So if I drop the UK sales would the US be a good option? Or would I get hit for tax there also?

 

[Martin Everson]

Like Sols said if you remain in UK then there is no option other than forking out for a complete arms distance setup. Where your customers are located makes zero difference.

 

[AMD]

Does someone know how pity the HMRC is when it comes to demonstrate the substance in the company ?

 

[Martin Everson]

Does someone know how pity the HMRC is when it comes to demonstrate the substance in the company ?

HMRC have no mercy like your the pillar that Tong Po is kicking from Bloodsport when it comes to medium size businesses. Unless you respond with legal council like multinationals do they are not gonna listen to a word you say. It will be a one way conversation. You would be best to seek legal opinion over any setup before embarking on its use in UK.

 

[AMD]

Unless you respond with legal council like multinationals do they are not gonna listen to a word you say. It will be a one way conversation. You would be best to seek legal opinion over any setup before embarking on its use in UK.

I thought it already would be like that. So better find someone to help you before you setup things like described above in the UK.