steviedeluxe

Possibly the most off-putting thread header ever - sorry about that!

The scenario is this: A Spanish contact of mine wants me to help with a web project he has in mind. At this point in time we can't know for sure if it will be successful financially, but the plus point is that it will cost very little to start up, the only real tangible costs will be the hosting server hire.

Now I can see various options:

i) He sets up a SA. I set up a limited company here in the UK. I charge his company for services rendered. I suppose I could do this as a sinlge trader though

ii) He sets up a SA and I become a director. Is this possible/advisable when I currently live in the UK?

iii) We set up a UK company together as directors.

iv) He sets up a SA (or goes autonomo) but pays me my cut in cash if we do make money. Don't get me wrong, I'm totally against this as it's unlawful, but it would cut out a load of paperwork

Of course there are various scenarios. What I'm wondering is a) any money earnt eg from advertising or sales of e-books - which country will the tax be payable in? b) which country is better as regarding tax rates if this business takes off (could be a purely theoretical question, I know, but good to be prepared). I understand the top rate of tax is now higher in the UK, but there again corporation tax is probably going to be cut. Swings and roundabouts.

thanks to anyone who reads this, I appreciate there may be few or none who have an answer to this.

fionamw

Only one bit I can part-answer.. the company publishing our book tells me income on sales (which will initially be all e-sales) count as UK income because it's a UK company. That's their version, anyway! Remains to be seen if we make a bean from it, of course. Good luck with getting the answers to the rest, I'll be interested to learn. (not least for my would-be chimney sweeping friend)

steviedeluxe

Interesting, thanks. So if I provide the internet hosting/web code then it will be recorded as a UK company even if the majority of the content (and target market) is Spain? Makes sense I suppose, as there will probably be sales from all over the world for many websites.

fionamw

Don't pretend to know, only know what they told me about our arrangement! guess it's cos sales whether off Amazon or their own website or any other book/publishing website, are ultimately a deal between the customer and the UK publisher/ & through them, us.... ? as I said, I know no more than that

Mitzyboy

Stevie, Ive recently registered a limited company to deal with an internet based business, and as a UK company and the way it is structured the taxes will be paid in the UK even though I reside in Spain

steviedeluxe

Thanks for your feedback - can I ask whether you did this because you had to, or because the tax implications were better, or some other reason? ( I appreciate you may not be in a position to expand on this) I'm just wondering if I would be able to be a director of a company set up as SA in Spain, even though I'm resident in the UK.

Mitzyboy

Well I'm a director of a company in the UK even though I'm a resident in Spain ... I'm not sure how it works the other way around I'm afraid. Main problem was the bank account, but thats sorted.

I guess I did it because it was the easiest option ... I didn't even consider doing it in Spain and to be honest although the business involves people in several countries, it is mainly based in the UK.

Setting up the company cost very little and was very simple, iirc £25 to companies house. I heard the costs of setting up a company in Spain for instance are much higher