Anyone know about tax when working abroad?
Discussion
As per a previous post i may be taking up a job in The Congo.
I seem to have been misinformed by HR as to the rate of tax i will pay.
I know there are a few guys here who work away and some clever people in general so thought i'd ask here
Am i liable for full UK tax? It'll be 28/28 so even time home and i know that doesn't qualify me for paying no tax.
If my company pay tax in The Congo can that be offset against what i'll be due here?!
Sorry i really don't know about these things!
Chop
I seem to have been misinformed by HR as to the rate of tax i will pay.
I know there are a few guys here who work away and some clever people in general so thought i'd ask here
Am i liable for full UK tax? It'll be 28/28 so even time home and i know that doesn't qualify me for paying no tax.
If my company pay tax in The Congo can that be offset against what i'll be due here?!
Sorry i really don't know about these things!
Chop
It would be difficult on a 28-28 rotation. The 90 days now includes the day you arrive and the day you leave, even if it was 11pm and 6.0am respectively. Also if you are maintaining a house, car, family, pets etc. here, then even if you do comply with the 90 day rule the authorities will not recognise you as an expat and you will be liable to tax accordingly. On the plus side the tax you pay in The Congo should be offset against your UK tax, but keep detailed records.
The authorities have been tightening up on this big time of late. There have been many prosecutions with people who were doing exactly what you are planning to do and claiming expat status.
I hope this helps.
G
The authorities have been tightening up on this big time of late. There have been many prosecutions with people who were doing exactly what you are planning to do and claiming expat status.
I hope this helps.
G
VetteG said:
It would be difficult on a 28-28 rotation. The 90 days now includes the day you arrive and the day you leave, even if it was 11pm and 6.0am respectively. Also if you are maintaining a house, car, family, pets etc. here, then even if you do comply with the 90 day rule the authorities will not recognise you as an expat and you will be liable to tax accordingly. On the plus side the tax you pay in The Congo should be offset against your UK tax, but keep detailed records.
The authorities have been tightening up on this big time of late. There have been many prosecutions with people who were doing exactly what you are planning to do and claiming expat status.
I hope this helps.
G
As i said i know i cant do the 90 day no tax thing and tbh don't want to. I have a family/kids/life etc The authorities have been tightening up on this big time of late. There have been many prosecutions with people who were doing exactly what you are planning to do and claiming expat status.
I hope this helps.
G
The only query i have here is about offset tax and you suggest it may well be ok. Thats a good sign.
Not quite that simple. As well as being in the UK for less than 90 days, you've also not to be domiciled here and in any case most countries have reciprocal income tax arrangements. When I worked in Texas for a year, I looked into it, but it was too difficult especially as an employee of a UK-based company.
alicrozier said:
Depends on your circumstances but if you are in the UK for less than 90 days you qualify for full expat status and won't pay any UK tax.
I know some folks who make sure they take 3 months holiday out of the country when they are back from rotation...
I know some folks who make sure they take 3 months holiday out of the country when they are back from rotation...
VetteG said:
It would be difficult on a 28-28 rotation. The 90 days now includes the day you arrive and the day you leave, even if it was 11pm and 6.0am respectively. Also if you are maintaining a house, car, family, pets etc. here, then even if you do comply with the 90 day rule the authorities will not recognise you as an expat and you will be liable to tax accordingly.
The day of exit is not classified as a day in the UK.TVR_owner said:
VetteG said:
It would be difficult on a 28-28 rotation. The 90 days now includes the day you arrive and the day you leave, even if it was 11pm and 6.0am respectively. Also if you are maintaining a house, car, family, pets etc. here, then even if you do comply with the 90 day rule the authorities will not recognise you as an expat and you will be liable to tax accordingly.
The day of exit is not classified as a day in the UK.G
i am not 100% sure that my advice is still current.
i used to calculate my days out of the country conservatively and count the days in and out of the country as IN ( just to be safe)
as a single guy back-in-the-day it was still VERY hard to only do 90 days in the country (and i was working 5&3, roughly)
the rules at the time were 93days pa, averaged over three years.
that last year i spent outside the UK and did not go home (even through Dublin, up on the ferry and spending only cash, so as not to get caught your honour..)
ahem,
anyway, good luck. if you can spend a hitch every time on holiday somewhere it works, if not.. dont even try.
as i say, the rules have probably become much stricter now, this was 2003.
Australia now is worse... dont even think about it!
i used to calculate my days out of the country conservatively and count the days in and out of the country as IN ( just to be safe)
as a single guy back-in-the-day it was still VERY hard to only do 90 days in the country (and i was working 5&3, roughly)
the rules at the time were 93days pa, averaged over three years.
that last year i spent outside the UK and did not go home (even through Dublin, up on the ferry and spending only cash, so as not to get caught your honour..)
ahem,
anyway, good luck. if you can spend a hitch every time on holiday somewhere it works, if not.. dont even try.
as i say, the rules have probably become much stricter now, this was 2003.
Australia now is worse... dont even think about it!
Quite suprised the Shephard case has been raised in relation to the OP. Mr Shephard was hardly employed abroad on a full time basis which was the OPs question regarding tax status.
The guidance (previous and current) is that if you leave the UK to work abroad (under a contract of employment), stay out for a full tax year (returning less than 91 days in that first year) then you are considered non-resident and not ordinarily resident for tax purposes. Someone who appears to stay out of the UK for only 170 days can hardly be considered to be in full time employment overseas...46 weeks per year, 5 days per week = 230 days.
Its also worth noting that those who do go abroad to work are given allowed to split tax free years either side of the actual full tax year absence as long as days present on average is not exceeded and the days in the qualifying Tax year remain intact. Something folk simply relocating are not afforded.
I see nothing changed in the guidance other than the loss of a transit day per UK visit and the clamping down of those taking the pee.
The guidance (previous and current) is that if you leave the UK to work abroad (under a contract of employment), stay out for a full tax year (returning less than 91 days in that first year) then you are considered non-resident and not ordinarily resident for tax purposes. Someone who appears to stay out of the UK for only 170 days can hardly be considered to be in full time employment overseas...46 weeks per year, 5 days per week = 230 days.
Its also worth noting that those who do go abroad to work are given allowed to split tax free years either side of the actual full tax year absence as long as days present on average is not exceeded and the days in the qualifying Tax year remain intact. Something folk simply relocating are not afforded.
I see nothing changed in the guidance other than the loss of a transit day per UK visit and the clamping down of those taking the pee.
Edited by TVR_owner on Friday 11th September 10:05
Edited by TVR_owner on Friday 11th September 10:30
Lambchopski said:
As per a previous post i may be taking up a job in The Congo.
I seem to have been misinformed by HR as to the rate of tax i will pay.
I know there are a few guys here who work away and some clever people in general so thought i'd ask here
Am i liable for full UK tax? It'll be 28/28 so even time home and i know that doesn't qualify me for paying no tax.
If my company pay tax in The Congo can that be offset against what i'll be due here?!
Sorry i really don't know about these things!
Chop
As the others have said 28/28 gives no chance of achieving non-residency in the UK if you intend to come back to your family during the 28 days off. You will therefore be liable for Uk taxation as if you worked here. You will alos be paying tax in the Congo. Provided there is a double tax treaty in place between the UK & Congo you can offset tax oaid there against tax liabilities here. Note that even if your employer pays your tax in the Congo that payment will be treated as your income by the Inland Revenue.I seem to have been misinformed by HR as to the rate of tax i will pay.
I know there are a few guys here who work away and some clever people in general so thought i'd ask here
Am i liable for full UK tax? It'll be 28/28 so even time home and i know that doesn't qualify me for paying no tax.
If my company pay tax in The Congo can that be offset against what i'll be due here?!
Sorry i really don't know about these things!
Chop
In most companies HR are a waste of space when it comes to explaining tax. If the company is a western international company they should have some tax people who can give you the correct advice, knowing all the aspects of your deal for going to Congo.
stiglet said:
TVR_owner said:
Quite suprised the Shephard case has been raised in relation to the OP. Mr Shephard was hardly employed abroad on a full time basis.
The reference to the Shepherd case was merely included as I didn't want to change what I thought was was a fairly clear exposition on the general topic by editing it myself. Post now deleted
TVR_owner said:
Didn't think there was any need to delete, I just think it may skews the perception on tax while working abroad full-time, but I guess given the case, someone on a 28 28 would have to agree with the tax authorities that the working rotation was a fulltime employment.
My post was too long anyway - whether or not germane to the OP. But the issues raised by the Robert Gaines-Cooper case have been highlighted in other posts on this thread and have caused one or two people to "review their position"!
944gav said:
Conga does not have a Double Taxation Agreement with the UK, however, if you pay inome tax there, you will receive unilateral relief for the foreign tax so you will not be taxed twice on the same income.
Having dug around a bit as my company HR are useless this seems to be the case. However it relies on getting info from my company and a certificate to state what that tax paid in country was!I still want to go but F me this is proving to be hard work. They put up a vacant position but dont seem keen to fill it!
944gav
I work in Azerbaijan on 28/28 basis and the way it works is my agent pays the Azeri tax on my behalf, at the end of the year they give me a tax certificate showing my earnings and tax paid, the earnings being what I have received plus what they have paid in tax, my UK tax burden is then calculated on those earnings, the Azeri tax paid is deducted from that figure.
I think you would be in the same situation, depending on the tax rate i9n Congo you could be on a good thing, however if it is low then there is little to offset against UK tax.
I work in Azerbaijan on 28/28 basis and the way it works is my agent pays the Azeri tax on my behalf, at the end of the year they give me a tax certificate showing my earnings and tax paid, the earnings being what I have received plus what they have paid in tax, my UK tax burden is then calculated on those earnings, the Azeri tax paid is deducted from that figure.
I think you would be in the same situation, depending on the tax rate i9n Congo you could be on a good thing, however if it is low then there is little to offset against UK tax.
Corpulent Tosser said:
944gav
I work in Azerbaijan on 28/28 basis and the way it works is my agent pays the Azeri tax on my behalf, at the end of the year they give me a tax certificate showing my earnings and tax paid, the earnings being what I have received plus what they have paid in tax, my UK tax burden is then calculated on those earnings, the Azeri tax paid is deducted from that figure.
I think you would be in the same situation, depending on the tax rate i9n Congo you could be on a good thing, however if it is low then there is little to offset against UK tax.
EXACTLY how i hope this will work.I work in Azerbaijan on 28/28 basis and the way it works is my agent pays the Azeri tax on my behalf, at the end of the year they give me a tax certificate showing my earnings and tax paid, the earnings being what I have received plus what they have paid in tax, my UK tax burden is then calculated on those earnings, the Azeri tax paid is deducted from that figure.
I think you would be in the same situation, depending on the tax rate i9n Congo you could be on a good thing, however if it is low then there is little to offset against UK tax.
Google congo tax. It's number 1 in the WORLD lol. Weird.
redchina said:
that last year i spent outside the UK and did not go home (even through Dublin, up on the ferry and spending only cash, so as not to get caught your honour..)
ahem,
Stumbled across this thread while searching 28/28 rotation... ahem,
Surely 'they' are well aware of this, shall we say, loop hole???
It can't be as easy as it sounds?
Good luck if you try that route!
Was last year that HMRC did an "audit" on me with my self assessments. Luckily I have a good accountant and we worked through it, going through P60's, P11D's, foreign tax letters, bank transfers (US$ salary payments) and payslips.
Working in Angola, I get the double taxation rule which works out as nice yearly cash bonus. But, it helps if you have an accountant who knows about this, as in the audit I found my old accountant did not fully understand it.
Anywho, it ended up with HMRC paying me
Was last year that HMRC did an "audit" on me with my self assessments. Luckily I have a good accountant and we worked through it, going through P60's, P11D's, foreign tax letters, bank transfers (US$ salary payments) and payslips.
Working in Angola, I get the double taxation rule which works out as nice yearly cash bonus. But, it helps if you have an accountant who knows about this, as in the audit I found my old accountant did not fully understand it.
Anywho, it ended up with HMRC paying me
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