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Salary and scheme

13 June 2012
Issue: 4357 / Categories:
A client was non-UK resident for 2011/12. He was employed for the first four months, but he subsequently carried out sub-contract work abroad and issued an invoice from his personal company. However, he paid the money directly to his personal account

My client was non-UK resident for the whole of 2011/12 although he had a dormant UK-registered company. He went abroad on 5 April 2011 to work as an employee under a contract of employment but this was terminated after four months. However he stayed abroad (in the Middle East) and got some contract work (for which he was paid about £75 000) for which he issued an invoice from his company. Unfortunately the company did not have a bank account so all the fees were paid straight into his personal bank account and have no doubt been spent.

If we treated the payment as a dividend there would be UK corporation tax to pay at 20% so I thought it would be best to call it salary. That brought me to the next problem which was that there was no...

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