From: kuacou241@yahoo.com
Newsgroups: uk.finance
Subject: Re: Setting up an offshore company
Date: 5 Jan 2005 02:29:17 -0800
   posting-account=52OeUQwAAAC7QJrvp7jj4eEf4XTrhX3H

If the source of income is UK and the work is performed in the UK, and
if the person(s) doing the work is (are) UK-resident (never mind
ordinarily resident) then you have (1) a permanent establishment, (2)
probably IR35 issues, (3) shadow director issues.

The only conceivable benefits that I could envisage are: (1) deduction
for foreign pension, at least foreign state pension (a very arcane
area), (2) (perhaps) avoidance of the need to publish accounts (whether
you need to register the company as a foreign company doing business in
England/Wales and (3) ease of staying below the radar (this verges on
tax evasion, be careful).

The issue comes up constantly in France, where (especially in the old
days when English companies weren't taxed if they did no business in
England) every hairdresser and baker wanted to incorporate a company in
England and run his/her shop in France through it. There's a lot of
stuff on misc.droit.fr (in French) on the subject.

There may be VAT complications or benefits. If the company is below the
VAT threshold that might be a savings. I have not been following the
issue of "related companies" and "collapsible corporations" set up by
related parties to avoid VAT registration; there must be rules to
regulate that and they might be unenforceable against a foreign
company. On the other hand, you are not foreign, and they can always
assess you for whatever they like.