Offshore Express LLC. Tax advantages of English companies

Tax advantages of English companies

This section considers doing business and the tax advantages of companies registered in the United Kingdom (UK).

There are certain features that those who want to have a company registered in the United Kingdom for conducting European and international transactions need to know. These features are attractive from a commercial, market and financial point of view.

Many people regard the UK as a place where business can be conducted under favourable tax conditions. It is this fact that makes the UK a place attractive for certain types of activity which, as a result, are carried out in the UK with considerable benefit for foreign enterprises.

Certain tax regimes are now blacklisted. This means that some authorities view with scepticism, if not suspicion, costs resulting from expenses. These costs are disallowed and are not recognised by the tax authorities in some developed countries. This reflects the view that anyone entering into a transaction with a traditional company must do so solely in order to obtain financial advantages or for pricing reasons and/or that the business lacks a genuine commercial basis, and that such business cannot be regarded as an activity to which normal financial requirements apply.

By contrast, expenses incurred by UK companies do not receive the same treatment.

Profit obtained from operating through a UK company is not restricted for tax purposes. Commercial loans, trade credit and other benefits are more readily provided to UK companies than to companies operating under a post-office box number in exotic or remote locations.

Of course, business conducted in the UK will be subject to UK taxes. The question therefore arises: can the financial integrity associated with a UK company be preserved without subjecting all operations to taxation? Can expenses of a UK company be shown where it incurs costs allowed by the authorities and made in an offshore zone without the risk of falling into the UK tax net? Can profit be obtained from operations conducted in the UK while avoiding the normal tax burden? And can this be done without drawing up false agreements? The answer to all these questions is yes, provided that the documentation is prepared correctly and certain rules are followed.

You can obtain appropriate advice on all these questions from Offshore Express LLC specialists.

Tax planning criteria.

Documentation must be developed taking into account the following circumstances:

be relatively simple to work with

contain references to laws accepted by the revenue authorities

have a reliable commercial basis

provide the fullest possible report on all income and expenses and audited accounts

avoid using zones that are blacklisted by the revenue authorities

usually, as a result, a small amount of tax is paid, significantly lower than would have to be paid without using an offshore structure.

Experience shows that if all these conditions are observed, it is not easy for the tax authorities to find grounds for claims against the company.

Types of UK companies

Offshore Express LLC provides clients with a wide choice of options for using UK companies that meet the above criteria. They are specially selected to satisfy various commercial needs, including export-import, manufacturing, management, consulting services, trade, etc. Some of these companies benefit from tax agreements, such as the EU Parent / Subsidiary Directive of 23rd July 1990. Each company has specially prepared documentation showing the revenue authorities that the required functions are performed by the company in the UK, which maximises the tax advantages of operating through a company registered in the UK. Illustrations of this position are given below.

Clients interested in using UK structures can contact a professional consultant of Offshore Express LLC.