Contractor Or Company?
Adam Thompson, tax manager at expat finance specialists The Fry Group, answered this question.
“It would appear that your circumstances are particularly complicated, and as such I cannot give you one simple answer at this stage.
“In order for me to provide the advice you require I will need to obtain additional information from you with regard to your residence pattern at present and what this would look like going forward, as well as further information on the work to be undertaken (duration of contracts etc).
“From a UK tax perspective, and in very simplistic terms, your residence position is determined under the statutory residence test. If you are non-resident under the test then you will only be subject to UK income tax on your UK sourced income. You would, however, have a tax liability in whichever country/countries you are deemed resident for tax purposes.
“If you are deemed to be resident in more than one country, then the double taxation treaty between those two countries (if one has been signed) will apply to determine your tax liability in each.
“If you establish a company through which you bill for your services then the location in which this company is registered will have a huge impact on your tax position and that of the company. If we assume that you are non-UK resident under the statutory residence test, then I would not advise you set up the company in the UK, as it will be subject to UK corporation tax on its profits and you will be subject to UK income tax on any income derived from it.
“It would make more sense to set up the company in a zero-tax jurisdiction such as Jersey. If you are UK resident under the test, then a corporate vehicle is probably the most tax efficient way of operating.”