Running a UK ltd but living in Hungary

BettiS wrote:

Hi Everyone,

May I ask if there is anyone here who runs a UK ltd from Hungary? I am a Virtual Assistant and moving to Hungary in the summer. The best option to carry on with this activity if I do this through my own company. I would love to hear from others how it works. My client base is in the UK. Many thanks, Betti

Ps. (Anyone from Szeged? )

You can do that but I think your VAT will be more complicated.  Since you would be in Hungary, your supply would be from Hungary to the UK.  And from the client perspective from Hungary, possibly with 27% VAT.   There's a fair bit of digging to do on cross border trade in services.

psst.....you could just carry on as you are and not tell anyone  and pretend you are in the UK. But that would absolutely be at your risk!  Could cause other complications.

This is only the way I thought it worked...
The way I understand it is that when you spend more than half your year in Hungary you would need to declare your personal worldwide income - and be taxed on personal income you get from all sources (including your own company) in Hungary instead. The UK currently has a "double taxation" treaty which means in theory you should not be taxed on personal income in both UK and Hungary.
The Ltd company itself would remain a UK entity so it could make profit and trade in the UK as it does now, charging UK VAT to UK clients and paying corporation tax in the UK. It's just when you get paid by the company/provide services to the company it could be complicated.
Things could change again when the UK leaves the EU!
I guess if the income from your Ltd company was minimal and below the thresholds in HU and UK for personal tax then it may help. You could then just let the Ltd company accrue funds until you return "full time" to the UK and then you could pay yourself a larger amount and be taxed in the UK as normal.

(I don't currently spend more than half my year in Hungary so it's less complicated...)

Thank you for your reply. Seems like it is more complicated than I thought. Arrggh....

gazamataz wrote:

The way I understand it is that when you spend more than half your year in Hungary you would need to declare your personal worldwide income - and be taxed on personal income you get from all sources (including your own company) in Hungary instead.

That.

Or if you declare your official permanent residence as being in Hungary, even if you spend less than half your time here, you are usually still liable for Hungarian income tax reporting and potential taxation in Hungary. This is a concept called "nexus". In other words, unless you are constantly on the move, declare no residence in any country, or live on a boat in international waters, some country, somewhere, will probably want to call you a tax resident and will want to tax you if that country has an income tax law.

BettiS wrote:

Seems like it is more complicated than I thought. Arrggh....

The tax man has been at this a long time. They have figured out all the angles. At least for small to medium sized businesses -- while large corporations have been known to "find ways" they can exploit for a long time, at least until the tax man catches up with them and amends the tax code.