Updated: 10th October 2021
If you’re not resident in the UK, you may be wondering whether you can run a UK-based limited company from abroad. There are various issues that you need to consider when running a company from abroad, including your tax liability and registered company address.
Paying the correct type and amount of tax is crucial in this situation, but you also need to think about the bank accounts your business will use, and the address where your company will be registered.
From a personal tax perspective, the rules differ depending on where you live abroad. Your tax residency will need to be determined - you may need to pay UK tax if you spend part of the year here, in addition to the tax due in your official place of residence.
A further consideration is the amount of time you might still spend in the UK, as you may need to visit regularly for meetings or other business matters. As far as your business taxes are concerned, your company will be subject to UK Corporation Tax on profits.
As a limited company director, you aren’t obliged to be resident in the UK to run your company. As your company is registered in the UK, however, you’d have to provide a registered company address in England, Wales, Scotland, or Northern Ireland.
Sometimes an agent is used for this purpose – an accountant’s office address or company formation agent, for example. You would also need to provide the address where you reside abroad so that Companies House or HMRC can contact you on business matters where necessary.
Both of these need to be physical addresses where mail can be sent, and the details are included in the Register of Companies at Companies House. As the register is publicly viewable, directors often choose to use a ‘service address’ for privacy and security.
You can open a business bank account in your place of residence. You aren’t obliged to use a UK-based account but in some cases it may be beneficial, and encourage smoother transactions with clients in the UK.
Operating a bank account in your country of residence would incur additional transaction fees and conversion costs. Different banks operate different systems so it’s worthwhile checking with your existing UK bank if you haven’t yet moved abroad.
It’s always advisable to open a separate business account for your company wherever you are resident - it makes accounting more straightforward, and separates your business and personal funds.
If you run a UK-based contractor company that would normally come under IR35 regulations, living abroad means you can still run your business but aren’t subject to the IR35, or intermediaries legislation.
IR35 rules are off-payroll regulations that prevent ‘disguised employment.’ Changes to this legislation have caused financial issues for some contractor businesses run by directors in this country, as end-clients are now responsible for determining contractors’ employment status.
The company must be registered with HMRC so you’d need to file and submit the statutory reports to Companies House and HMRC, as you would if you were a company director resident in the UK.
If you’d like more information tailored to your individual circumstances, Real Business Rescue can help. We’ll provide independent professional advice on running a UK limited company from abroad, and offer free consultations. Please get in touch with one of the team – we operate a network of offices throughout the UK.
13th October 2021
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