Problem with UK LLP and taxation!? Non-UK resident

[churumbelo]

I have a client in Ireland and I invoice this client through a UK LLP (I might invoice other clients in other countries too). I incorporated there because the client only wanted invoices from an European company. A UK LLP is pass-through and if the members do not reside in the UK, the LLP is not managed and controlled from the UK, and has no income or gains arising in the UK, then it is tax exempt in the UK (similar to a US LLC). I meet these 3 requirements. I have not even been to the UK.

So I have just spoken to an accountant and he just said that I am liable to pay PIT in the UK for the revenue that I received from Ireland into the LLP. I told him that I meet those 3 requirements, and that Ireland is not the UK, plus I am not a tax resident there. But he says there is some agreement between Ireland and the UK and I have to pay around 20% PIT in the UK.

This come as a surprise since I spoke to other accountants in the past and they did not tell me about this. Plus I did not find any information online. I have now to do some research on my own and double check this.

What do you think about this? Am I in a mess?

@wellington

 

[Sols]

The accountant is wrong and probably just inexperienced dealing with non-resident/international clients.

You can ask the accountant for a reference as to which law or agreement is applicable to your income in this case. If he's citing a specific law or agreement, that should be easy for him to provide.

 

[churumbelo]

The accountant is wrong and probably just inexperienced dealing with non-resident/international clients.

You can ask the accountant for a reference as to which law or agreement is applicable to your income in this case. If he's citing a specific law or agreement, that should be easy for him to provide.

It was an initial free consultation. I told him I would have to double check and get back to him. So I guess he didn't disclose all the details. My fault also because I did not ask specifically that question.

He said about an economy agreement between Ireland and the UK because of economic ties. I am not saying he is wrong, but it seems odd to me I have to pay PIT in the UK for the revenue coming from Ireland through my LLP.
He says he works with companies with links between UK and Ireland and he also has a relative in Ireland working as an accountant there and they know all of this.

 

[Sols]

He said about an economy agreement between Ireland and the UK because of economic ties. I am not saying he is wrong, but it seems odd to me I have to pay PIT in the UK for the revenue coming from Ireland through my LLP.
He says he works with companies with links between UK and Ireland and he also has a relative in Ireland working as an accountant there and they know all of this.

There are definitely special agreements between Ireland and UK, but I don't see how you'd be in scope for any of them in a way that makes you liable for UK (or Irish) tax in the situation described here.

You can always hire another accountant/tax lawyer if you want peace of mind.

 

[churumbelo]

There are definitely special agreements between Ireland and UK, but I don't see how you'd be in scope for any of them in a way that makes you liable for UK (or Irish) tax in the situation described here.

You can always hire another accountant/tax lawyer if you want peace of mind.

I think the same. I'm already speaking to another accountant to verify the information and that I'm not in a big mess with the HMRC.

 

[CyprusLawyer101]

Also .. a paid consultation always does the trick

 

[churumbelo]

Also .. a paid consultation always does the trick

It is not about paying, I do not mind paying. I have paid in the past to "experts". The problem is when one pays and the expert has no idea. You can speak to 3 of them and the 3 of them might come up with different solutions that are not compatible with the others.

I was not even looking for a consultation. I was just looking for an accountant to ask the HMRC an exemption for the SA800 based on what I explained in the first post. Then this accountant reached out to me, and when I explained my situation, came up with that. Something that I never heard before speaking in the past to other accountants or doing my own research. So should I pay then this guy who says so? Paying him would not make that what he previously said is correct/incorrect.

 

[CyprusLawyer101]

It is not about paying, I do not mind paying. I have paid in the past to "experts". The problem is when one pays and the expert has no idea. You can speak to 3 of them and the 3 of them might come up with different solutions that are not compatible with the others.

I was not even looking for a consultation. I was just looking for an accountant to ask the HMRC an exemption for the SA800 based on what I explained in the first post. Then this accountant reached out to me, and when I explained my situation, came up with that. Something that I never heard before speaking in the past to other accountants or doing my own research. So should I pay then this guy who says so? Paying him would not make that what he previously said is correct/incorrect.

I did not intent being critical of your comment; it is indeed a fact that consultants would think of pay, before assessing whether they can provide what they are being asked for. Good luck!

 

[churumbelo]

I did not intent being critical of your comment; it is indeed a fact that consultants would think of pay, before assessing whether they can provide what they are being asked for. Good luck!

No worries. I knew that you were not being critical. Thank you!

I was just speaking my mind out about paying a consultation, because in my experience, and my friends' experience, paying does not guarantee we would receive good advice or facts.

As a matter of fact, I was looking to pay someone to ask the exemption to the HMRC and then filing the annual accounts each year. And in the process I have spoken to a few that had no idea what they were talking about.

This last guy advised me to get rid of the UK LLP and incorporate in the country where my client is because the tax burden is lower than paying PIT in the UK...
Yesterday another guy told me there is nothing in the law about getting an exemption for the SA800, that it is impossible and it must always be filed, and he would call it "corporate tax", when it is a partnership.
The problem is finding a good professional who knows what he does and don't get you into trouble. I could have paid to these guys, but it does not guarantee anything.

In any case, after speaking to a couple more. I think these know what they are doing and agree with me about the other guy being wrong, as @Sols also think.

I will pick one of them and will look no more. In the meantime, I will still do some more research, just in case the guy that told me I have to pay PIT got a point. Which I think he did not, but I like to be 100% sure.

 

[koohl]

When I read through this thread, it sounds to me like you are dealing with people who pose as consultants and prostitute themselves for relatively low pay. Thus, you get what you pay for.

If you can't get the right answer after so many attempts, you should probably raise the bar a bit and try professional consultants, not cheap ones like those you've got here.

 

[churumbelo]

When I read through this thread, it sounds to me like you are dealing with people who pose as consultants and prostitute themselves for relatively low pay. Thus, you get what you pay for.

If you can't get the right answer after so many attempts, you should probably raise the bar a bit and try professional consultants, not cheap ones like those you've got here.

Chartered accountants. That's not the issue. But some do not know much when international taxation and structures come into play. I did not even mention any price. I had a consultation (for a different business) in the past with a guy who charges $700/hour, and it was a waste of my time and money. There are good and bad professionals, like in any other line of work.

In any case, I have already found a couple of accountants who seems to know what they do.