Is Tax Payable?
Discussion
A friend of mine (yes, really) has a job and earns circa £30K. He's on PAYE. In addition to this he has a 2nd job where he's self employed. The income is quite sporadic, and usually amounts to around £5K a year. He's quite keen not to do anything wrong so in early April he logs into his HMRC online thingy and discloses his extra £5K income in the freetype box. He asks for confirmation of how much he owes and that he'll pay it in one hit. It normally takes until about December, and then he gets a letter with the exact amount payable, usually about a grand, and he pays in full on his debit card. All good.
This year, 23/24, he did a 3rd job, at a one off event in Saudi Arabia. He took a week's holiday from work, he flew out at their expense, did the work, and was paid a one off payment of around £15K. He's says he's going to disclose it as he does his 2nd job. But if was money earned whilst working in Saudi, paid to him by a Saudi company, based in Saudi. It was paid in UK pounds into his UK current account via an IBAN number.
If he liable for UK tax on the £15K?
This year, 23/24, he did a 3rd job, at a one off event in Saudi Arabia. He took a week's holiday from work, he flew out at their expense, did the work, and was paid a one off payment of around £15K. He's says he's going to disclose it as he does his 2nd job. But if was money earned whilst working in Saudi, paid to him by a Saudi company, based in Saudi. It was paid in UK pounds into his UK current account via an IBAN number.
If he liable for UK tax on the £15K?
TwigtheWonderkid said:
Don't know if this makes any difference, doubt it does, but the Saudi firm he worked for deducted Saudi tax from his payment, just over 5%.
This is withholding tax & 5% is the right amount for what you describe. UK-Saudi double tax treaty may allow this as a credit against UK taxbrickwall said:
Yes.
When you are ordinarily tax resident in the uk you are liable for tax on your worldwide income.
Please excuse my numptiness but my extremely limited understanding suggests that earned money abroad is only taxable if one brings that money into the UK? If OP's friend was self employed and kept the money outside the UK, then it wouldn't be taxable? When you are ordinarily tax resident in the uk you are liable for tax on your worldwide income.
KPHs said:
Please excuse my numptiness but my extremely limited understanding suggests that earned money abroad is only taxable if one brings that money into the UK? If OP's friend was self employed and kept the money outside the UK, then it wouldn't be taxable?
https://www.gov.uk/tax-foreign-income/non-domiciled-residentsWhole load of pretty complicated rules relating to this topic.
But, generally if you're UK resident and domicile you pay tax on all income earned wherever it is earned in the world, and wherever it sits once paid.
uknick said:
KPHs said:
Please excuse my numptiness but my extremely limited understanding suggests that earned money abroad is only taxable if one brings that money into the UK? If OP's friend was self employed and kept the money outside the UK, then it wouldn't be taxable?
https://www.gov.uk/tax-foreign-income/non-domiciled-residentsWhole load of pretty complicated rules relating to this topic.
But, generally if you're UK resident and domicile you pay tax on all income earned wherever it is earned in the world, and wherever it sits once paid.
It gets pretty complicated pretty quickly. Very broadly:
1. Most people who are UK resident in the UK for tax purposes are also “domiciled” in the UK for tax purposes. If you are resident but not “domiciled”, you are claiming “non-dom” status
2. Those that are resident and domiciled in the UK (I.e. most people) pay tax on their worldwide income, wherever it’s earned and wherever it’s kept. You may be eligible to claim back taxes paid on earnings in other countries under double-taxation treaties.
3. In broad terms, non-dom status allows you to not pay tax on income earned abroad that isn’t remitted to the UK. However claiming “non-dom” status is complicated, and not open to everyone (in general, it is hard to claim non-dom status if you were born in or grew up in the UK)
4. Claiming non-dom status may result in paying the non-dom annual charge (which is £30,000 or £60,000 a year).
5. Non-Dom is not to be confused with “non-resident” - that is to say, people who don’t live in the UK. HMRC has some rules/tests/guidelines about what constitutes “residency”, but broadly there are no fancy tricks to pull…to be non-resident you have to not live in the UK.
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