Is it possible for PayPal UK account holders to withdraw in USD, through cheque? Are they allowed to maintain funds in a currency other than the Pound Sterling?
If you check out the Withdrawal options, Cheque is not an option. You can only withdraw to your local bank account or a US bank account. Cheque tends to be slow and they inevitably still needs to be deposited into a bank account. You do not need to worry about Paypal accessing or withdrawing money from your bank account if you opt for the bank deposit. It is fast and very secure.
Thanks for the reply. The issue is not about being secure, if I withdraw directly to bank account, it could be tracked easily by the taxman. If i can withdraw using cheque, I can deposit it in my offshore account in a country which has very low tax rates.
you can keep money in your paypal account in $$$ but when you want to withdraw you have to convert it to pounds. the way arrount it is to have an account(bank) in $$$ and then you can deal in $$$.
Technically speaking, whether you bring the money into UK or not does not really matter. Income tax is not a deposit tax but one which is derived from an income. An income is when you make money and as long as you are in the UK when you made the money, the income would be subjected to uk tax. You could keep it all in paypal or spend it there and yet it would still be deemed taxable. You should really talk to your accountant or tax authority about this before you start breaking tax laws which would most likely be quite serious.
My accountant told me that as long as the money does not get into the UK banking system, there is very little chance of the tax authorities tracking it. The only way they can trace it would be by asking paypal to provide my transaction details which they might do if (and only if) they suspect foul play. Anyways, thanks for the heads up.
Your accountant is correct, it is when the money is repatriated into the UK. Thing is, your Paypal account is a UK account and regulated by the FSA. If it hits the account then it is taxable income already, it is alraedy in the system. You need to get a different payment option from whoever is paying you. btw where is your offshore account? I'm interested. Panama IBC?