Can I use my personal account in the UK for my offshore company?
Question:
recently we had the first business with a UK client and I was mainly involved with it.
as my company is not registered in the UK yet it doesn't have a bank account here in the UK.
the client complained about the fee incurred to them for international money transfer and i was wondering if I could get the transfer to my personal account in the UK on behalf of my company.
It's completely fine with the taxation law of the country where the company is registered. but I wonder how it works in the UK and if there is any possibility of tax charge to myself or the company..
and we provided research/analysis/translation service and my company is exempt from VAT where it's registered..but i don't know if we have to follow UK taxation rule regarding that as well..
any advice will be greatly appreciated..
thank you!
Answer:
NO,. WHEN THE OWNER WITHDRAWS MONEY OR OTHER ASSETS FROM THE BUSINESS AND TRANSFERS THE ASSET TO PERSONAL ACCOUNTS IT BECOMES RECLASSIFIED FROM A BUSINESS ASSET TO A NONBUSINESS ASSET.
Open a UK account in the company's name.
No matter where the company is registered, if it's a limited company, their laws will mean it is illegal to trade other than in the company's name and if you use your account you are misappropriating the company's funds.
If the company is carrying on business in the UK then it doesn't matter where it is registered it is liable to UK corporation tax and VAT (if the turnover is above the VAT threshold - the services you have described are not VAT exempt) and must be registered for tax purposes (and file accounts and a tax return annually), however this may be mitigated by double taxation relief depending where the company is registered.
If the payment is made directly to your personal bank account then this transaction would have to be registered as turnover in the accounts - however the funds could be transferred back into the company through your directors current/loan account. If you do not repay these funds they may be construed to be earned income and liable for PAYE tax and NICs.
I have assumed that you are a director.
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