We can offer employers assistance with the regulatory complications of employing staff in the major centres of trade and commerce, including the U.K., China (including Hong Kong), Singapore, Australia, and Western Continental Europe. We can also offer solutions to minimise the costs of employing key staff while at the same time maximising the receipts by those employees.

There are particular issues in Europe with which our offices in the Isle of Man, London and Luxembourg can provide specific assistance to ensure that both employers and employees maximise the financial benefits from their relationship whilst remaining fully compliant with local regulations.

The most common solutions are those relating to new recruits from overseas who are employed on short-term contracts in U.K.

Legislation in the U.K. regarding those not domiciled and not ordinarily resident in the U.K. is quite unambiguous. Accepting the technical complications of determining residence and domicile, where an employee is resident but not ordinarily resident in the U.K. all U.K.-based earnings are taxable but other earnings are only taxed if they have been remitted to the U.K. While there are obvious opportunities to mitigate U.K. taxation from the foregoing care has to be taken with regard to dual contract arrangements as H.M. Revenue & Customs appear to be taking a much more aggressive stance with regard to such.

Additionally there is in the U.K. legislation to prevent individuals from operating limited companies where he/she is the only employee and has only one customer – the so-called IR35 regulations. Basically there are significant savings that can be obtained by paying out profits of the company as dividends instead of increasing the remuneration of the employee as dividends are not subject to National Insurance. If profits are retained within the company there are differences between the rates of tax suffered by companies and those suffered by individuals. We can provide solutions which do not fall within the IR35 regulations.

	INCOME TAX
	Taxable Bands Allowances		2006-07 (£)	2007-08 (£)
	Starting rate 10 %		0 - 2,150	0 - 2,230
	Basic rate 22%		2,151 - 33,300	2,231 - 34,600
	Higher rate 40%		over 33,300	over 34,600

	CORPORATION TAX
	Rate		2006-07 (£)	2007-08 (£)
	Starting rate: 0%		N/A	N/A
	Marginal relief		N/A	N/A
	Small companies’ rate		19%	20%
	Small companies’ lower limit		£0–£300,000	£0–£300,000
	Marginal relief		£300,001–£1,500,000	£300,001–£1,500,000
	Main rate:30%		£1,500,001 or more	£1,500,001 or more
	Non-corporate distribution rate		N/A	N/A

		2006-07	2007-08
	Small Companies' Rate*	19%	20%
	Small Companies' Rate can be claimed by qualifying companies with profits at a rate not exceeding	£300,000	£300,000
	Marginal Small Companies Relief Lower Limit	£300,000	£300,000
	Marginal Small Companies Relief Upper Limit	£1,500,000	£1,500,000
	Marginal Small Company Relief Fraction	11/400	1/40
	Main rate of corporation tax	30%	30%
	Special rate for unit trusts and open-ended investment companies	20%	20%

The services on offer include assistance with the preparation of contracts of employment, management of the employer’s obligations with regard to employee-protection (health and safety at work, unfair dismissal, trade union representation and the likes), and the design of remuneration policies to minimise the costs of taxation and social security both to the employer and to the employee.

Please contact Brian Monk at our Isle of Man office for further discussions:
Email: monk@GTA.com
Telephone: +44 (0)1624 811020