Ask Clive: Setting up business abroad

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Ask Clive: Setting up business abroad

Question: I am setting up a business from The Netherlands where I am resident. My customers will all be in the UK. I will not need to be physically in the UK for more than a few days each month. Will I be subject to UK Income Tax on these earnings?

There are a number of criteria, which will determine whether you are resident, ordinarily resident and / or domiciled in the UK and therefore subject to UK taxation. It will largely depend upon how many days and/ or part of a day you spend in the UK. If you own or rent a property in the UK as well as run a business with UK customers this may be sufficient to make to resident here. So you need to keep a detailed record of the days and part days you are in the UK each week / month and be prepared to justify to HMRC that you are not resident in the UK. Other factors such as having a UK bank account might also contribute to being taxed in the UK.

This area of taxation can become very complicated and a full appreciation of all the facts of your situation is required. Once you have a track record of the number of days each week / month you spend in the UK, you should seek the advice of a chartered accountant as to whether you fall within the rules for UK taxation.

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