Tax question

blueroyal

I am a UK higher rate taxpayer and have recently become a non exec director of an Irish company for which I will be paid an annual fee in euros. Instead of going on the Irish company's payroll and receive the fee myself, can I set up a UK company to invoice the Irish company for the director's fee? The company would employ my wife and pay her a salary on which she would pay tax at her marginal rate. This would mean she would use her personal allowance and she would be taxed at the basic rate on the remainder.

Murdina

To do what you are suggesting you need to take proper paid for professional advice.

What is your wife doing for this salary she is going to get?

Are you familiar with tax legislation on cross border transactions? Transfer pricing, exchange rate adjustments, the UK:Eire tax treaty and so on? All these could be relevant to you hence why you need paid for advice for someone who knows about tax in UK and Eire.

Have you checked out what it costs to run a company (even just one running in the UK) in terms of accounting fees for accounts, companies house returns, payroll and so on? These costs need to be weighed against any tax you may think you are going to save.