Should affiliates form a company?

[ambergambler]

Does it makes sense for affiliates to form a company, which receives the payouts from operators?

What do you experienced guys do?

[baldidiot]

Depends on your circumstances. Cop out answer but it really does.

If you're part time and not making huge amounts then you can probably get away without. If you're doing decent numbers and full time there are many benefits to being a ltd company, but they come with additional costs and responsibilities.

I would say the majority of full time UK affiliates (assuming UK based on your VAT thread) are probably set up as companies.

[Syndicate]

Like already mentioned it depends on your circumstances. Alternatives to setting up at home are offshore, or other low tax and Non Vat jurisdictions!

The bigger you are the more it needs thinking about, but that comes for residency too!

[ambergambler]

I am toying with the idea of setting up a cheap St Vincent company where there is no tax and no bookkeeping. I just wonder if this is too dodgy a location for the casinos to pay to. Failing that, a UK company looks the best option within the EU.

On residency, I am considering moving from the UK to Malta, and just paying tax on whatever I remit. Maybe pay myself minimum wage from the company which would cover Maltese Social Security and a couple of cans of Cisk each month. Decisions decisions.

[Syndicate]

In Malta company tax after rebates can be reduced to just 5% (35%-30%). You would also have the benefit of dividend repatriation. Other alternatives are East bloc countries were personal income tax is low. In fact, you might have noticed many companies such has Skrill + William Hill operate through Bulgaria - Max company tax 10% - Max income tax 10% (one relieved by the other). Companies cost a couple hundred, bank accounts easy, accountant / audit wont cost the earth. Full EU etc.

Belize- Seychelles- Caribbean ok for cheap offshore alternative.

I personally prefer Hong Kong and Switzerland, but i have a lot of different business and it suits my need.

I don't know whether you read about BREXIT - but UK and EU isn't sure anymore!!

I am toying with the idea of setting up a cheap St Vincent company where there is no tax and no bookkeeping. I just wonder if this is too dodgy a location for the casinos to pay to. Failing that, a UK company looks the best option within the EU.

On residency, I am considering moving from the UK to Malta, and just paying tax on whatever I remit. Maybe pay myself minimum wage from the company which would cover Maltese Social Security and a couple of cans of Cisk each month. Decisions decisions.

[sweetbet]

Maybe you should speak to an accountant who can advise you on what would be the best solution for yourself.

[Muppet]

Or maybe you could pay your taxes and not try to mooch off all the other poor saps who actually pay their tax and make a positive contribution to the society they live in.

[ambergambler]

Or maybe you could pay your taxes and not try to mooch off all the other poor saps who actually pay their tax and make a positive contribution to the society they live in.

maybe you like paying for duck ponds for your MP

[ambergambler]

In Malta company tax after rebates can be reduced to just 5% (35%-30%). You would also have the benefit of dividend repatriation. Other alternatives are East bloc countries were personal income tax is low. In fact, you might have noticed many companies such has Skrill + William Hill operate through Bulgaria - Max company tax 10% - Max income tax 10% (one relieved by the other). Companies cost a couple hundred, bank accounts easy, accountant / audit wont cost the earth. Full EU etc.

Belize- Seychelles- Caribbean ok for cheap offshore alternative.

I personally prefer Hong Kong and Switzerland, but i have a lot of different business and it suits my need.

I don't know whether you read about BREXIT - but UK and EU isn't sure anymore!!

My wife is from the eastern bloc (EU) so I would automatically acquire her EU treaty rights in case of Brexit (not that I think Article 50 will be triggered anytime this century), but you make a good point. I know Bulgarian companies quite well, and the 10% tax is attractive. Unfortunately the mafia have a lot of links to the Bulgarian company house and have a tendency to reassign successful foreign companies to their cronies.

Slovakia is an interesting place for residency, as there is no tax on dividends. You could be resident there with a company in Malta and pay 5% tax all in. But, you do have to live in Slovakia, which is challenging once the cheap beer and beautiful women become old.

Thanks all for the input.

[Muppet]

maybe you like paying for duck ponds for your MP

Actually I quite like my kids having a decent school to go to, good quality hospitals, parks, public transport and smooth roads. I could go on.

This may or may not apply to you but...

People running "offshore" companies to dodge paying tax while still wanting to enjoy their first world lifestyle in their home country are the worst kind of selfish. Happy to hoard their wealth while leeching off the other tax paying members of their society. Yes I know, this industry is full of it. It is particularly money obsessed and it's safe to say that it doesn't attract the most upstanding members of the human race at times.

I fully support efforts made around the world to crack down on that sort of tax evasion. You want to set up a company in a banana republic and not pay any tax? That's fine by me, so long as you emigrate and live there while you do it. If you instead want to stay at home and try to play games with the tax man then, for the sake of your fellow citizens who are subsidising your lifestyle, I hope you get caught.

[ambergambler]

Actually I quite like my kids having a decent school to go to, good quality hospitals, parks, public transport and smooth roads. I could go on.

This may or may not apply to you but...

People running "offshore" companies to dodge paying tax while still wanting to enjoy their first world lifestyle in their home country are the worst kind of selfish. Happy to hoard their wealth while leeching off the other tax paying members of their society. Yes I know, this industry is full of it. It is particularly money obsessed and it's safe to say that it doesn't attract the most upstanding members of the human race at times.

I fully support efforts made around the world to crack down on that sort of tax evasion. You want to set up a company in a banana republic and not pay any tax? That's fine by me, so long as you emigrate and live there while you do it. If you instead want to stay at home and try to play games with the tax man then, for the sake of your fellow citizens who are subsidising your lifestyle, I hope you get caught.

A few things.


1) Opening a company in another jurisdiction is not illegal, and it isn't tax evasion. Your local MP whose duck pond you most graciously paid for from your taxes is probably doing the same thing right now. You can hope I am caught all you like, but I will be quite open with every tax authority about what I am doing. Because it is not illegal in any way.

2) I lived in Switzerland half my life, and never paid more than 15% income tax. You don't get more first world than Switzerland, and yet the government(s) there manages to maintain it all at a tax rate half of its neighbours. The best health care, outstanding trains and great schools for your kids. They do it by carefully managing the income tax they receive and not wasting it on duck ponds for their MPs or benefits for the lazy
and feckless.

3) St Vincent is only half a banana republic. It exports bananas, but is part of the Commonwealth. Its head of state is the Queen.

4) if you are an affiliate working in the gaming industry, many (most?) of your customers will be operating in a tax advantageous environment. If you are so offended by tax optimization and do not wish to be a hypocrite, then I suggest you switch to promote Fair trade coffee or something.

5) As this isn't the Guardian, I will ignore any more of your socialist worker rants.

[Muppet]

Wow. You lived somewhere that you only have to pay 15% and still you want to evade it. Christ on a bike... some people are never satisfied. That duck pond you keep going on about must have been expensive. Is it gold plated? Maybe you should go sit next to it next time you have lunch and get your money's worth. Be sure no-one lazy or feckless is hanging around though, you wouldn't want them to derive any enjoyment from it.

I don't see that I am a hypocrite. I own a company in the country in which I live and I pay the tax rate stipulated here. That is all I can control. Thank you for classing me as a "socialist worker", I take it as a compliment. Though for some reason I suspect that you didn't intend that. Nice try though.

As for your first point, clearly you didn't read and/or comprehend what I wrote. Have another read and reconsider. or perhaps you did and it was a bit close to the bone?

[wonderpunter]

The day's of living 1st world and earning tax free offshore are long gone, the law has been modernised to pick up on this and penalties are pretty steep, I lived in a country which only taxed local income for 10 years, ultimately I moved back to Europe and formed a corporation here, I pay the tax required but it also has it's benefits. with a good accountant there is nothing to fear and you can always invest to offset the tax taking a larger payout in the future on returns.

[ambergambler]

The day's of living 1st world and earning tax free offshore are long gone, the law has been modernised to pick up on this and penalties are pretty steep, I lived in a country which only taxed local income for 10 years, ultimately I moved back to Europe and formed a corporation here, I pay the tax required but it also has it's benefits. with a good accountant there is nothing to fear and you can always invest to offset the tax taking a larger payout in the future on returns.

Living in Europe is a must for me, whatever the tax level. There are a few countries in Europe, however, which tax non-citizens only on their local income. The UK is an obvious example, as is Malta.

I apologize that this thread has become a discussion of offshore incorporation/banking.

To drag the topic back to the original, and having thought about it a bit, I can see the following potential benefits of a gambling affiliate forming a company to carry out business.

1) Limitation of legal liability, in case the operator sues you for copyright infringement or in case a visitor sues you for recommending a dodgy bookie.
2) Easier to one day sell the business and its assets (websites, IP, mailing lists, contracts with operators) if packaged as a company.
3) Ability to incorporate in a more tax-friendly country than country of residence.

These 3 benefits are probably why I will go the company route.

[JackTenSuited]

Personall I went from a sole trader to Ltd company a couple of years ago, my accountant advised it as I would save more as I went on and it's been easy enough to do (though I wouldn't do it without an accountant).

[DanHorvat]

Actually I quite like my kids having a decent school to go to, good quality hospitals, parks, public transport and smooth roads. I could go on.

It doesn't really work that way. The tax that some people are dodging by running an offshore company is corporation tax and it's not the only form of taxation.

There's income tax, there's VAT which applies to almost everything you buy, there's national insurance, and depending on the country there are other stuff too, such as separate healthcare insurance, tax on cigarettes, tax on beer etc. Corporation tax in the UK accounts for only 8% of all tax income.

In fact, the reason corporation tax even exists is not to get the money - it's to make companies reinvest their profit.

There's a limit to how much money you can throw into parks and schools. Once a certain level is achieved, that's it, the law of diminishing returns applies and it's much more about running the thing wisely than it is about throwing money in. And I'd say it's more important for mom and dad to be able to pay for tennis lessons (by paying less taxes and having more money) than it is for more money to go into the tax system.

All government ministries and agencies operate within a budget and they always spend everything - otherwise they'd get less next year. That's the way it works. Give them extra and they'll launch a national salt awareness campaign. The proverbial duck pond.

It's all funded mostly by taxing peasants. And, if anything, citizens should demand from their government to spend less while doing more. So more money stays in the active part of economy.

The first-world lifestyle isn't in parks and schools. It's created by companies, including tax-dodging ones. Internet, mobile phones, fashion, skyscrapers, credit cards, cars, medications, affiliate websites. Not living in a perfectly developed country myself, I know where the difference is - and it isn't in schools, roads and parks. It's in the fact that you're building Bentleys and we are not. Schools are just as good.

In economy, 1000 isn't a 1000, but is multiplied many times as it gets turned over in the system. What corporation tax is taxing are the leftovers after the wheels have been turning for 365 days. It's a really minute portion of that frantic money exchange that's been going on.

It's a common misunderstanding of economy that tax is the driving force. Tax is anything but. Money paid in taxes is lost from the wheels of economy forever.

Last but not least, an entrepreneur who has a company in Isle of Man isn't being disloyal to you as a tax payer. His patriotism isn't expressed through corporation tax, that's all.

[DanHorvat]

To answer the original question, and this is the best I can do - it pays off to run business through a company because all your work accumulates over the years. You build up your credit score, the banks start talking to you, you can get some tax benefits, maybe some EU money if you're in the EU.

You can do a lot of things as a legal entity that you can not as a person. But I'd say the credit score is the most important, as it's calculated a bit differently than personal credit score, and the magnitude is unlimited whereas personal credit score is always just enough to buy a house and a car. Could be a better house and a better car, but it's always a house and a car.

Plus you are actually taxed less if you run a successful company than if you're an employee with the equivalent income.

However, a budding entrepreneur who is stretching every penny and can't afford to pay taxes should evade them in any human way possible. Otherwise you might not make it. Business isn't easy.

But as soon as you can afford a company, an accountant and an office, you should do it. If you know exactly why you're doing it.

[justbookies]

Having looked into this, if you set up an offshore company (ie: in a tax free haven) and live in the UK, it is criminal. I know people do it, but it is deemed criminal in the UK. The offshore company would be a sham. I have had this advice from Gibraltar-based company incorporation agents among others.

The only way to do it legitimately is to have an offshore company and also live somewhere that is a tax haven too. Personally I would keep the company's location and mine separate but that is just me. Mind you, if you live in a tax free zone and are a one-man band, there may be no point in having a company anyway, just get it all paid direct to you.

[DanHorvat]

What about Isle of Man and other crown dependencies? Is it criminal to live in the UK and form a company there?

Can someone point me to some legislation that says it's a crime to do business through a foreign-based company in the UK?

Note: the so-called "off-shore" company is a legit company that's based in another country, usually where taxes are favorable. It's not a scam per se.

[Syndicate]

To be honest Dan i just stopped answering when i saw people coming with social aspects and mis-informed advice. The fact is anybody can set up in another jurisdiction, if they can satisfy legal procedure. Tax structuring in the UK is very normal, and when the new UK licensing regime came in many syndicates were forced to move to places you have mentioned (Isle of Man), Jersey, Gibraltar and Guernsey. Furthermore, it's normal to locate betting hedge funds in the Caribbean because the cost is lower.

As long as everything is declared, most types of business can be structured to reduce tax and VAT liability. And, while their is sometimes burden of proof, necessity is often enough.

You are obviously more generous than me, because i just finish up shaking my head when things are obviously wrong!

What about Isle of Man and other crown dependencies? Is it criminal to live in the UK and form a company there?

Can someone point me to some legislation that says it's a crime to do business through a foreign-based company in the UK?

Note: the so-called "off-shore" company is a legit company that's based in another country, usually where taxes are favorable. It's not a scam per se.