Filing Taxes in Malta and the U.K. is Tricky Business
Posted: 19/06/2011 Filed under: Malta Taxation, UK Taxation Leave a comment »
U.K. residents may gain from arranging some financial accounts to be managed in Malta. Unfortunately, doing so can raise some confusing questions about taxes. Taxes in multiple countries are typically fairly simple, but details are complicated in this case by the fact that individuals and businesses are subject to different regulations regarding Maltese and U.K. taxation.
Taxes for individuals are rather straight forward. One must first identify whether or not a person is either a resident of Malta, are domiciled in Malta, or both. A resident of Malta is described as any individual who is present in the country for at least six months out of a year. One who is domiciled in Malta, however, must actually release domiciliation in all other countries, meaning their primary residency for the yearlong period is in Malta. Those who fall under both categories are liable to be taxed for all income worldwide by the Maltese government. Those who are simply residents, however, pay a low variable tax only on income generated in Malta.
Generally speaking, individuals who are not residents or domiciled in Malta must pay some amount of taxes to each country. Typically, this will mean paying worldwide earning taxes in the U.K. while paying taxes only on Maltese earnings in Malta. Taxes may be filed directly through government offices or though an accounting firm.
Companies are a far different story. While things may have been different in the past, today a company that is registered in Malta or a foreign company that is fiscally managed from Malta is, in the eyes of the EU and the government, a resident of the country and must pay tax on any and all worldwide income, including capital gains. Taxes for such organization are steep. The standard income tax rate has been set at 35%, although some businesses may wrangle slightly lower rates.
Those who choose to manage financial accounts typically have accounting firms at their disposal. When it comes to handling tax time, working through these firms is probably a good idea. Those without such resources, however, need simply to contact representatives from the respective governments’ tax agency es to acquire the necessary paperwork.
UK Tax Laws A Spaghetti Bowl
Posted: 17/08/2010 Filed under: UK Taxation | Tags: corporate tax, corporation tax, Tax, tax refunds, Taxation Leave a comment »The “spaghetti bowl” of UK tax law is to be simplified with a goal to boost the British economy.
The new government says that the tax system has become a hindrance to businesses under Labour, and that by simplifying it and making it more competitive for small firms it would stimulate economic growth.
George Osborne states “Today we turn the promises of opposition into the policies of government.”
Treasury minister David Gauke said “The tax system created by the previous government was overly complex and has made the tax affairs of millions of families and businesses across the UK extremely complicated.
“We need to reduce the complexities in our tax system and the coalition is committed to delivering that goal.”
The OTS’s remit includes UK taxes and duties controlled by HM Revenue and Customs, but it will not deal with tax credits or taxes administered by other bodies nor will it have any say in the setting of tax rates.
The chairperson of the new body will be Michael Jack, former Conservative MP and Treasury minister and the director shall be tax director at the Chartered Institute of Taxation, John Whiting. Neither shall be paid for their services.
This is truly excellent news for small businesses in UK, with the tax system easier to understand, people wont be as worried to start up in the market, causing the British economy to grow again. I know my clinets will welcome it and I am relived the government has finally seen the light.
If you need help understanding the laws on tax as they stand or how the changes will affect you please get in touch with us here at St Matthew’s eAccounting. We are happy to help.
UK Tax Laws Opaque And Complex.
Posted: 13/08/2010 Filed under: UK Taxation | Tags: corporate tax, corporation tax, Tax, uk companies Leave a comment »UK tax law is to be simplified. This is to cut the burden on business and attract foreign investment, George Osborne says.
The new body shall initially host a two year review – first looking at all 400 tax relief, exemptions and allowances within the system to see how they could be streamlined. The second review will be to find ways to simplify the tax system for small businesses, this includes trying to find a simplified alternative to the contentious IR35 code.
A Office for Tax Simplification is being set up to streamline the 11,000-page tax code.
Mr. Osborne says Britain had “one of the most complex and opaque tax codes in the world” and it needed to be simplified.
Announcing the new body at a press conference, Mr. Osborne said his “dream” was “that people might actually understand the tax laws which they were being asked to comply with”.
It is set to advise ministers where the tax system is too complex but it will not look at tax credits, which Mr. Osborne says he considers to be part of the benefits system.
Labour claim to have backed the simplicity movement but then announced ministers were bringing in yet more overly complex new taxes at the same time.
I believe this is very exciting for the future of small businesses, making the market a lot easier to break into.
Inflation Up But Interests Stay Down In the UK
Posted: 09/08/2010 Filed under: UK Taxation, Uncategorized, VAT, VAT Registration | Tags: business, business concerns, corporate tax, corporation tax, Small Business, UK tax, VAT Leave a comment »Inflation has been a hot topic in the media these past six months and I believe it can be strongly linked to the VAT rise from 17.5pc to 20pc in January. This may not be rocket science and perhaps it is something we may have to live with but it bears pointing out.
Tensions within the Bank of England Monetary Policy Committee will be “excruciating” for the next 18 months as strong economic data raises the pressure on policy-makers to raise interest rates, according to Peter Spencer, chairman of the Ernst & Young ITEM Club.
Inflation has grown faster than the Bank’s 2pc goal for 41 of the past 50 months and has averaged higher than 3pc for two years, prompting several letters of explanation to the Chancellor from Mervyn King, the Bank’s Governor. ITEM today says that inflation will remain above target until the end of 2011, largely as a result of the planned increase in VAT.
From May until June the GDP, gross domestic product (the measure of the countries overall economic output) growth was 1.1pc, the strongest in four years and far higher than expectations. This has added to pressure on policy-makers to raise rates from their historic low of 0.5pc, Bank policy-maker Andrew Sentance has already called for a rate rise for the past two months.
However, ITEM warns that rates will have to stay on hold until the start of 2014 if the economy is to be given a chance to recover. “The problem is that on the surface the economy looks to be inflating but once you delve deeper, you can see that the situation is very disinflationary,” Mr Spencer said.
So Britain are to hold out on the inflation rise. Staying at 0.5pc will help to build a stronger economy, even though the effects of the VAT rise are said to be felt shortly.
We’ll hang on in there and get through this tough time, coming out stronger and more prepared on the other side. Lower interest rates will help with this process and it will be a great relief to many households and small businesses that they are not set to rise. In my opinion a rise in VAT may turn out to be a small price to pay.
Exciting Figures As UK Economy Strengthens
Posted: 07/08/2010 Filed under: UK Immigration, UK Taxation | Tags: business concerns, corporate tax, corporation tax, economy, moving to UK Leave a comment »The UK is showing how strong it can be, confounding experts by growing at almost double the rate predicted in the past three months. It did trigger some thoughts in me concerning the necessity of some of the austerity measures, in particular the redundancies and taxation changes really need to be as severe as planned. But more about that in a minute.
For now let’s revel in some numbers
Gross domestic product (GDP) in the quarter to June leapt at an amazing 1.1pc, the most since the first three months of 2006, lifting sterling 1.2pc against the dollar. Economists had forecast just 0.6pc growth as a realistic aim.
The surge was driven by an astounding recovery in construction and the fortitude of Britain’s powerhouse services sectors. This puts UK growth for the first half at 1.4pc – already ahead of the Treasury’s own forecasts of 1.2pc for the full 12 months.
Capital Economics, which was predicting a 1pc annual increase, revised its position, describing the numbers as “a pleasant surprise” and saying: “The figures suggest that growth in 2010 overall may now be closer to 1.5pc.”
Although universally welcomed, the speed of growth reignited debate about the Chancellor’s savage austerity measures to get the public finances under control. In the short term, the planned £40bn of tax rises and spending cuts are expected to soak up demand and kill off growth.
My opinion is that messing with the UK taxation now, after such an impressive surge in the right direction is playing with fire. The government should allow the economy to recover more before throwing their unwanted weight around.
A License To Print Money In The UK?
Posted: 29/07/2010 Filed under: Small Business, UK Investment, UK Taxation | Tags: business, business concerns, corporate tax, corporation tax, economy Leave a comment »In recent news it was revealed that economist believe the Bank of England could restart quantative easing in the near future. What does this mean in real terms, well, basically the government is considering printing more money. Whether this is a good or a bad thing, just like with VAT rises, depends on who you talk to.
Minutes have been released from this month’s BoE rate-settings meeting and showed that the topic of “money printing” had been discussed for the first time since February.
The discussion was prompted by fears over the economic recovery.
“In the light of the news over the month, it seemed likely that growth would be weaker than previously expected,” the minutes said.
In a broad debate about policy actions in the event of an unexpected weakening or strengthening of the economy, the minutes suggested: “A further modest monetary stimulus would act to offset the softening in demand prospects and make it more likely that the inflation target would be met in the medium term.”
Vicky Redwood of Capital Economics noted that the discussion was “perhaps the clearest steer so far that more QE could yet be on the agenda”, and added: “July’s minutes suggest that a near-term interest rate hike still looks unlikely. What’s more, there were some dovish comments from other members, who noted that the prospects for GDP had deteriorated a little.”
Philip Shaw at Investec agreed, saying: “The key change was that members recognised that the outlook for activity had weakened since June’s meeting, and as a result, actively discussed the option of easing policy again… We cannot rule out a further round of QE… The outlook for interest rates is shrouded in uncertainty.”
Uncertainty indeed, with the government saying one thing and the Bank of England saying another, how are the British public supposed to know where they stand? I think they need to converse with each other in order to give us an honest answer.
UK Taxation System Gets An Overhaul
Posted: 28/07/2010 Filed under: UK Taxation | Tags: business concerns, corporation tax, non dom tax, Taxation, uk companies, UK tax Leave a comment »There are more talks for the launch of the Office of Tax Systems in today’s news. It always makes me a little nervous when they start talking about changes to the UK tax system. I know how hard some of clients find it when it happens. Lucky we are here to help them.
Anyway back to the subject at hand. The new version will apparently simplify the existing overly complicated version, making it much easier for all Britons, especially small businesses.
Liam Byrne, Shadow Chief Secretary to the Treasury said he welcomed the significance of the government’s plan to simplify the tax system, but he then went onto say “today’s announcement, I’m afraid, sounds rather more like an attempt to grab headlines than real evidence of a push to improve legislation”.
He called on the government to scrap plans to “complicate the tax system by introducing a marriage tax allowance, all for the sake of sending an ineffective £3 a week signal of what his party thinks a family should look like” and what he said was a “more complicated stamp duty system when it comes to energy conservation for housing”.
The TUC union body said it was concerned the OTS could become a “softening-up exercise for tax cuts for the rich”.
But the launch was welcomed by business chiefs.
Richard Baron, of the Institute of Directors, said it was “a brilliant idea” but that it would be judged by its results.
David Frost, director general of the British Chambers of Commerce, said it was “a necessary and long overdue response to the relentless chop and change of tax law”.
I find all of these statements interesting, it is about time the government updated its archaic taxation system. If people understand what they are paying tax for it makes it much easier for them to part with their money. On the other hand the most profound utterance definitely comes from Mr Baron, we will indeed judge it by its results.
If taxation still baffles you or you are concerned about how these changes may affect you please get in touch with us here at St Mathew’s eAccounting and we will be pleased to help you see it all crystal clearly.
Interest Rates To Rise Or Not To Rise
Posted: 27/07/2010 Filed under: Small Business, UK Immigration, UK Taxation, Uncategorized, VAT | Tags: business concerns, corporation tax, tax refunds, Taxation, UK tax, VAT Leave a comment »Andrew Sentance was on his own in calling for a rise in interest rates from 0.5pc to 0.75pc for a second month running. With VAT up, taxes up and employment down it seems to be one of the few things to stay stagnant.
Mr. Sentance argued that “the inflation outlook had shifted sufficiently to justify beginning to raise interest rates gradually”.
The rate of inflation has remained constantly high this year and despite falling 0.5pc, from 3.7pc to 3.2pc in the past two months, is still way above the banks target of 2pc. However the call was denied again as majority of members believe inflation will fall over time.
The minutes from a Bank of England rate-settlement meeting read “the weight of evidence from both home and abroad continued to indicate that the margin of spare capacity was likely to bear down on inflation and bring it back to the target in the medium once the impact of temporary factors had worn off.”
This time however, there was some sympathy with Mr. Sentance as policymakers acknowledged that inflation is “likely to remain above target for some months as the impact of the past increases in indirect taxes and oil prices, and the depreciation of sterling offset downward pressure on inflation from spare capacity”.
The increase in VAT to 20pc is also “likely to add to inflation [as] some companies may anticipate the increase by raising prices in advance”. They fear a rise in “medium-term inflation expectations” becoming entrenched by feeding into pay settlements.
However, the “committee’s central view remained that the substantial margin of spare capacity was likely to persist for some time and would bear down on inflation over the medium term”.
In my humble opinion this view is good, UK tax payers are happy to keep the 0.5pc interest rate, Mr. Sentance needs to stop pushing for this and let the market settle in its own time. It seems there are more than one or two experts who agree with me.
UK Immigration Balances Workforce.
Posted: 19/07/2010 Filed under: Non Dom, Small Business, UK Taxation | Tags: business, business concerns, Immigration, Small Business Leave a comment »Theresa May, the Home Secretary, has been defending the coalition governments immigration cap today, claiming it will not be damaging for the British economy.
The restriction will be taking place immediately, reducing the number of immigrants travelling from outside the European Union to 21,100. The temporary restriction has been put in place to ensure large volumes of people don’t try to rush into the UK before the permanent policy is put into place next year.
The cap on immigration was one of the Conservative parties flagship policies during the election campaign, and it is their aim to reduce numbers entering the country from hundreds of thousands to tens of thousands.
I believe this is dangerous for the British economy. So do many others but May has completely rejected this idea, she has argued that the cap has not been harmful to business and the competitiveness of other economies.
“I don’t think that anybody would ever suggest that Australia or the United States or New Zealand, in operating an annual limit, weren’t able to get into the country the skilled people that they need and that their economies were somehow suffering from that annual limit” she said.
In fact my information is that Australia as a minimum has indeed suffered from large skilled labor shortages and continues to do so. I don’t know enough about the Australian economy to state that this is a direct result of their immigration policy but I know many who claim it is.
If I know that then why doesn’t May?
If we want to put the ‘Great’, back in Great Britain, we do need skilled people to come into our country; limiting their numbers will not do anything for our prosperity.
Are We Our Own Worst Enemy? VAT Rises.
Posted: 12/07/2010 Filed under: UK Investment, UK Taxation, VAT, VAT Registration | Tags: business concerns, corporation tax, Tax, UK tax, VAT Leave a comment »It looks as though us Britons are tightening our purse strings again, as we fear another recession backlash. It is said we fear a ‘double dip’ in the economic climate after the recent VAT increase to 20pc.
Being more careful about what we purchase, four in ten have said they wardrobe raided in order to recycle their old garments as opposed to buying new, up to date fashion.
According to the survey conducted by GfK NOP, a third of consumers claimed they had stopped dining out in order to save the pennies and credit cards are being used less for those luxury items we indulge upon.
It isn’t just the consumer-facing companies that seem to be threatened either, people are now changing their lifestyle choices, 6pc surveyed are postponing getting married and an equal amount are putting off having children until the threat has passed.
Ironically, the fear that has been created surrounded the second recession is, in fact, what just may cause the ‘double dip’. Our inclination as a nation to save during these times of ‘economic uncertainy’ could have a devastating effect in the long run.
It is my opinion that consumers should not be so over-cautious when considering the coming of the second recession.
If you are worried about the double dip (AGAIN) and want to discuss any aspect of your business, Please contact us here at St Matthew’s eAccounting. We know business in the uK
