Avoiding Tax by Moving Country?

John_Pierpoint

Pennywise wrote: »

Isle of Man isn't in the UK - http://en.wikipedia.org/wiki/Isle_of_Man

and

The tax deducted from the dividend isn't "admissable for credit" under the double taxation treaty - http://www.hmrc.gov.uk/manuals/dtmanual/dt9955.htm

As for getting a flat in the IOM - that will only work if you really do all the administration and management from there. I think you'd have a very hard job "proving" to HMRC that all the business work was done there if you continued to "live" in the UK. Wouldn't it adversely affect your business if you didn't answer emails or phone calls or did any admin work whilst you were in the UK - can you business really run itself in the intervening periods whilst you were back in the UK?

Don't you think that other people have considered offshoring to IOM? It's been a hot topic for at least the 30 years I've been an accountant. We've all been there and got the T shirt. I've only ever had one client who managed to do it and that was because they were so big, they employed administrators and managers whose roles were moved to offices in the IOM so that the work was actually done in the IOM - the owners (who were hands-off shareholders) just went over every month for management meetings and held their directors meetings and AGMS over there as well. You wouldn't believe how much time the HMRC tax inspector spent trying to argue that it was a UK based trading company because the directors/shareholders were still resident in the UK - we had to produce proof that they really didn't get involved in any of the day to day operations by proving that their IOM staff did it all. HMRC aren't idiots - they've seen it all before!

At the end of the day, for an IOM company to work if you're just a small one man co, you have to move there and live there as well, i.e. both you and your business must become IOM resident. That works very well and is very popular, but again is only for the high wealth people as it's not cheap to live there and not cheap to travel back to the UK.



You've just answered your own question. If you're hoping to continue to live in the UK, then you're working in the UK and the income derived from it is taxable in the UK. For your business profits not to be taxed in the UK whilst you reside here, you'd have to do all the work to derive those profits abroad or you'd have to have staff doing the work abroad on your behalf.

There is a thriving business based on supplying small high value to weight items free of VAT and import taxes from the Channel Islands.

What is good enough for Tesco is good enough for the rest of us.

Thinks: must change the ink cartridge on my printer or perhaps get a long distance flight from the island of Ireland and fill up with diesel and packets of fags from Luxembourg, before heaving some cases of champagne into the boot near Épernay

antrobus

John_Pierpoint wrote: »

There is a thriving business based on supplying small high value to weight items free of VAT and import taxes from the Channel Islands.....

Aka ' Low Value Consignment Relief' - if that nice Mr Osborne is to be believed, that will all be coming to an end sometime soon.

John_Pierpoint

We already have a post office that has just delivered a "first class" item to me today with a post mark of 23rd September.