Chinese Contract Payment Logistics

nrtsmith

Hi,

I am not sure that this is right place to be posting this kind of question, but hopefully there will be somone on here that can help out.

I have been a contractor numerous times in the UK mostly working within big Financial or Public Sector firms, these have all been done working through an agency so the agency would pay me via an umbrella company and the umbrella company would pay my tax.

I recently decided to set up my own consultancy and try to win clients independantly. Luckily enough I have already won a large client in China and have recently travelled there to agree on a Statement of Work. I will have three memers of staff working part time for me and the majority of the work will be done remotly within the UK.

My problem is that I will be recieiving large sums of money at key stages of delivery, my predicament is that client will not pay this into a UK bank account because of the amount of money that will cost to do.

I am yet to set myself up as business and would like advise on the following:

When I set up a business what would be the best option i.e - sole trader, LTD company etc?

My girlfriend is Chinese and has two bank accounts over there what would the implications / options be to pay the money into those accounts and then transfare the money to the UK company account?

I basically don't want to pay tax in China and in the UK and then be left with a fraction of the amount of money that has been agreed upon - but obv I dont want to be breaking any laws.

Any feedback or advice on these matters is much appreciated.

Cheers

Nick

Horace

I know that the Chinese will not pay into a UK bank because they don't like money to leave China and it is something to do with their banking rules.

I think that you may be better off approaching your local chamber of commerce because they will have an overseas trade section who should be able to provide you with the information that you need. I know that Birmingham Chamber has several overseas trade sections and they give advice on trading with other countries including China.

As you work in the UK you will have to pay tax in the UK - there is no getting away from that unfortunately.

nrtsmith

Thanks Horace I'll check out my local chamber of commerce for advice.

paddyrg

Talk to a tax advising accountancy who deal with overseas transactions like dalesevans - the last thing you want is to pay tax twice, which can easily happen. Next time you're there on business, make an appointment to see the local British Embassy, they will do what they can to help with trade where Chinese money is going to the UK, or at least it is nice for them to know what's going on on their turf ;-)