The British Isles is still a favorite destination of Polish entrepreneurs looking for a friendly environment for doing business. Attractive tax regulations, low social security contributions, high tax-free amount, low bureaucracy and friendly attitude of offices mean that more and more Polish companies have moved to Great Britain, while still operating legally in Poland. Here are some of the categories of companies or activities that could benefit the most from the move.
England is a paradise for every entrepreneur, why?
The most tempting factor in registering a company in the UK is the lower, yet easier to account for, taxes and social security fees. For example, the UK VAT rate is 20% and Poland is 23% . The difference is also their number – a Polish entrepreneur can pay as many as 18 different taxes, and the British one only 8, which of course translates into the time that should be spent on settlements, instead of work. However, the statement of social security contributions has the strongest influence on the imagination. In our country they will amount to about PLN 9,600 per year, while in the UK it will be only PLN 689 to 1,250!
Poles are moving companies in England en masse. Check if you can too.
Taking the above factors into account, the move to Great Britain will be suitable for small and medium-sized enterprises, for which the money saved thanks to lower tax rates and social security contributions will enable further development or even prevent the risk of bankruptcy. It is also worth emphasizing the saving of time, which can be spent on work instead of complicated settlements.
Another argument in favor of Great Britain is the tax-free amount. In 2017, it is 11,500 pounds! This means that in order to pay income tax in England, you will have to exceed this amount (approx. PLN 60,000 )! Against this background, Poland is a bit pale with its rate – PLN 3,091 per year . This means that it is enough to earn PLN 258 a month to be taxed. The fact that the minimum subsistence level in our country is estimated at PLN 544 per month does not require any comment.
See also: Hiring EU Citizens in the UK and getting a NIN after Brexit
In the light of the above-mentioned facts, people running a company whose nature means that the tax-free amount in the UK will not be exceeded may think about moving a company to the British Isles. Such an entrepreneur, earning about PLN 5,000 per month in Polish conditions, will avoid the need to pay income tax.
Who is the company in England for?
After discussing the financial aspects, it is time to deal with the nature of your business.
The UK is a great location for companies whose services do not require a physical presence at the place of registration . Therefore, they will undoubtedly be enterprises operating thanks to the opportunities offered by the Internet (possibly other mass communication tools). The scope of their activities may include, inter alia:
- e-commerce
- advisory and consulting services
- brokerage in sales
- creating and managing websites
- marketing, advertising including internet
- specialist services (e.g. translators)
- domestic and international transport
Sample profit of a Polish entrepreneur setting up a company in England
Let’s assume that the freelancer Mr. Jan, working in Warsaw, earning about PLN 5,000 per month, registers his activity in the UK to be able to enjoy the benefits of the high tax-free amount and low ZUS rates in force there, but only physically functioning in Poland. In this case, Mr. Jan earns on the following fields:
- The tax-free amount in the UK is approximately PLN 60,000, and in Poland PLN 3,091. The annual tax profit will amount to nearly PLN 11,000.
- Annual insurance premiums in the UK are approximately PLN 3,600, and in Poland approximately PLN 13,000. The profit on insurance will therefore amount to nearly PLN 9,500.
- Less restrictive regulations on the company’s operating costs allow to increase the costs lowering the tax base.
- Settlement of income tax once a year, which reduces the time spent on accounting matters
As you can see, the profit on taxes alone amounts to about PLN 20,000 each year, which gives the amount of PLN 800,000 for 40 years of professional activity . And the tax-free amount in England is constantly growing! This is a classic example of why you should move your business to the UK.
Set up a company in the UK without leaving your office. Check the offer.
What if I earn more than PLN 60,000 a year?
Interestingly, moving to the British Isles should be carefully thought out by people earning… a lot . The reason is that there are three tax rates in force there, according to which an entity earning more than £ 150,000 a year will have to pay tax of as much as 45% . There is a way to do it. One of the solutions is the merger of the LTD company with the offshore company, which allows, in accordance with the regulations, to reduce the tax base up to 5% per year.
What is the opinion of the Polish tax office?
A frequent question that appears in the minds of entrepreneurs is: what do the Polish tax office and ZUS say? The answer is extremely simple. The profit of the director of the company is taxed only in England under the Agreement on the avoidance of double taxation between Great Britain and Poland , ZUS may be paid only in one country of the European Union under the Principles of coordination of social security systems in the EU, and accounting matters are subject to the British HMRC due to the company’s UK tax residence.
A company in England and Brexit – expert’s comment
Recent events in the UK have shown that the UK will pursue an even more liberal and pro-business course. Independence from the bureaucratic European Union and rigid regulations allows for the pursuit of an economic policy that attracts business even more, as evidenced by the ever-growing number of new companies established there. For every entrepreneur who values freedom and independence, Theresa May’s government has awarded another gift. – Agnieszka Moryc Managing Director at Admiral Tax
Company in England in 24 hours. Read more.
Summary
Great Britain attracted over 700,000 new companies in 2016 alone. Liberal tax regulations, low tax and insurance rates attract entrepreneurs like a magnet, offering them an ideal environment to grow and earn money.