Advice on new company setup and compliance with HMRC, MTD and VAT requirements

I am currently a UK citizen and UK tax resident and anticipate being UK tax resident for at least the next tax year but I have the option to permanently move overseas. I am exploring the options available to me to setup a new business and correctly meet all of my legal and tax obligations. From investigation the options available to me fall into three broad categories: 1 - Set up as a sole trader 2 - Set up a UK Ltd company with myself as the 100% shareholder and director 3 - Set up an overseas company with myself as the 100% shareholder and director and currently resident in the UK Due to the current and forthcoming obligations in 2024-2027: - GDPR / ICO registration, compliance and most likely additional reporing requirements in 2025+. - HMRC quarterly reporting under MTD (Making Tax Digital) and mandatory purchase and use of digital software. - 19-25% sliding scale corporation tax likely to increase further. - Penalties for missing dates compounded due to additional reporting requirements from MTD. - Setup and ongoing accountancy costs to ensure accurate and timely quarterly reporting even for the simplest one-man-band. My investigation has concluded: 1 - There is no benefit to setup as a sole trader - reporting obligations under ICO, HMRC and MTD quarterly reporting combined with required software makes engaging an accountant required and drives the costs to thousands without the benefit of a formal company structure. 2 - There is no benefit to try to minimise initial setup costs of a UK Ltd company (no VAT and reduced accountant time) - with the introduction of MTD, sliding tax bands and quarterly reporting requirements it is easier to setup from the outset full VAT and full accounts with full accountant - costs which would also cover MTD quarterly reporting and ensure I am meeting all of my legal requirements as a director. These costs therefore makes it prudent to investigate overseas options, for the example below I have specified BVI (British Virgin Islands) but consider the advice from a general standpoint of any overseas company (Panama/Hong Kong/Singapore) controlled from the UK. My questions are: - Q1 - Assuming I remain a UK tax resident and setup an overseas company in the BVI with myself as the sole director and shareholder, what would be my legal obligations for reporting and tax to HMRC (please comment on / correct my understanding): a. As a UK citizen and tax resident I would be liable for personal tax and NI contributions on any salary / dividends paid to me, I would complete an annual self assessment to HMRC detailing any salary and dividends received and paying my personal tax in two payments on account. b. The BVI company would be seen as controlled from the UK and treated as tax resident / pass-through company. c. The company has no interest in real estate / land in the UK and therefore would not need to be registered at Companies House on the Register of Overseas Entities. d. The company would not be selling goods directly to customers in the UK therefore has no VAT registration or reporting obligations. e. The company would file and report in the BVI. f. As a UK controlled entity the company would be obligated to report to HMRC summarised accounts annually (as opposed to full accounts quarterly). g. As a pass-through the company would pay UK corporation tax on all profits at the applicable UK corporate tax rate. h. The company would pay HMRC a single payment annually (as opposed to 2-4 payments on account). - Q2 - Assuming that in the future I leave the UK and do not return - zero days in the UK per year (please comment on / correct my understanding): a. I would cease to be a UK tax resident on the day I left the UK and did not return. b. The BVI company would no longer be seen as controlled from the UK - do I / how would I report this to HMRC? c. At this time the company would no longer be obligated to report to HMRC. d. The company would not be selling goods directly to customers in the UK therefore has no UK VAT obligations. e. The company would continue to file and report in the BVI. Thank you for your time.

Hi tropic,
HMRC cannot comment on future events as legislation and/or plans may change. 
Thank you.

 

Excellent, thank you for making it so easy to comply, truly a world class service.