NT Tax code - only abroad for 9 months in the end
Discussion
Hi,
This time last year I accepted a 3-year expatriate assignment with my employer and began working in Africa. I obtained a NT tax code April 1st and didn't pay any tax from that date onwards. End of last year our industry took a downturn, a result of which was all expats were returned to their home country to either find a new job or be made redundant. I managed to get my old job back in January and my tax code changed back to a UK code as expected - all fine so far.
My query is, because I was only overseas for a total of 9 months, how will IR treat my tax-free earnings? I expect I'm going to get a tax bill for a certain amount given I won't meet the 91-day rule (I think) but not sure if they pro-rata it, or simply say I should have been paying tax the whole time - can anyone offer some insight? My employer deducted fair-share deductions from my wages during the assignment so I know I will be able to partially offset any tax bill against that but just trying to plan ahead a little bit better.
Ta.
This time last year I accepted a 3-year expatriate assignment with my employer and began working in Africa. I obtained a NT tax code April 1st and didn't pay any tax from that date onwards. End of last year our industry took a downturn, a result of which was all expats were returned to their home country to either find a new job or be made redundant. I managed to get my old job back in January and my tax code changed back to a UK code as expected - all fine so far.
My query is, because I was only overseas for a total of 9 months, how will IR treat my tax-free earnings? I expect I'm going to get a tax bill for a certain amount given I won't meet the 91-day rule (I think) but not sure if they pro-rata it, or simply say I should have been paying tax the whole time - can anyone offer some insight? My employer deducted fair-share deductions from my wages during the assignment so I know I will be able to partially offset any tax bill against that but just trying to plan ahead a little bit better.
Ta.
That could change things but depends on what the deal is you have with your employer.
Where I work we have hypo-tax everywhere except the Gulf. The principal of hypo-tax is normally that they deduct from your income the equivalent tax to that you pay in the Uk, but in return look after your tax liability for the period you are overseas. So in your case they take care of your Tanzania taxes, but also any Uk tax liability you incur on the same income. They should be referring you to a tax advisor to sort yourself out as it can be tricky if you are into double tax agreements.
Where I work we have hypo-tax everywhere except the Gulf. The principal of hypo-tax is normally that they deduct from your income the equivalent tax to that you pay in the Uk, but in return look after your tax liability for the period you are overseas. So in your case they take care of your Tanzania taxes, but also any Uk tax liability you incur on the same income. They should be referring you to a tax advisor to sort yourself out as it can be tricky if you are into double tax agreements.
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