Taxation when working abroad

[dave87]

Hmm, Tax Evasion, not a good thing to have listed on your CV

Tax avoidance, on the otherhand, is perfectly legal and if done well, can save thousands.*


*I think I've got them the rightway round - Schmunk should be able to confirm

[schmunk]

You dont tell them you were working, you tell them you went travelling for a bit.

Is the wrong answer - the UK and CH government have information-sharing agreements (as we do with most other countries in the world), and that *could* bring HMRC a-knocking.


dave87:

Evasion is illegal and wrong.

Avoidance is perfectly legal (but still wrong, according to the current government).


The press is currently having kittens about very rich people selling transferring their shares to a trust/company controlled by themselves to retain control but create a gain taxable at 10% now, rather than the 18% that will be payable if they transact from 6 April onwards.

*shock, horror* rich, well advised people save themselves money by undertaking perfectly legal, and not in any way 'dodgy' transactions - won't somebody think of the children?

If you're still unsure, consider if you were told that petrol is £1.00 a litre at the local garage until Saturday, but it'll be £1.80 a litre for the forseeable future after that. Wouldn't you go and fill up by Saturday?

/rant

[dave87]

Much as I thought.

The government wants to make it appear wrong because it makes a mockery of their redistribution based economic policies, which in reality have made very little difference.

Aren't political agendas wonderful things?

[Cliffk]

I read the thread with interest and wonder what the tax situation is when working abroad for 3 years and longer to have earnings paid into a UK Bank account.

Any comment would be appreciated.

[Cliffk]

Hmm, Tax Evasion, not a good thing to have listed on your CV

Tax avoidance, on the otherhand, is perfectly legal and if done well, can save thousands.*


*I think I've got them the rightway round - Schmunk should be able to confirm

Foreign employment "registered with the UK REVENUE" so perfectly legal tax planning!

Question applies therefore only re UK BANK account.

[Funkstar]

My understanding is that as long as you are in the country for no more than 90 days in the tax year, you are exempt from income tax on your earnings.

[schmunk]

I read the thread with interest and wonder what the tax situation is when working abroad for 3 years and longer to have earnings paid into a UK Bank account.

Any comment would be appreciated.

As long as you
* leave the UK for full time employment
* limit your return visits to fewer than 183 days in any tax year
* limit your visits fewer than 91 days on average, counted over a rolling 4 year period

you will be considered Not Resident and Not Ordinarily Resident from the day of departure, and will not be taxable on your non-UK employment income in the UK, no matter what you do with it (i.e. you can be paid in the UK, bring your income into the UK, whatever you want).

Any income from UK workdays *may* be taxable in the UK, depending on where you go, and your residence status in that country.

Any investment or property income deriving from the UK will remain taxable in the UK, although you will be able to use your personal allowance of £5,435 for the current tax year.

[TeePee]

This is very interesting to me, as I thought I was 'avoiding' UK taxes, but it looks like I'm in the clear. The interesting thing is that in the US taxation is voluntary. Really!

[schmunk]

This is very interesting to me, as I thought I was 'avoiding' UK taxes, but it looks like I'm in the clear. The interesting thing is that in the US taxation is voluntary. Really!

From the sound of your situation (from previous posts), you are most likely Not Resident in the UK, and therefore not taxable on your non-UK employment income.

However, I must stress that US tax is *NOT NOT NOT* voluntary. The IRS are a nasty bunch and will chase you for any taxes due until your death, and then they have contracted with the hounds of hell to continue the chase thereafter.

Depending on your US residence status, and earnings level ($8,750 earnings minimum for a single-filer in 2007), it is pretty likely that you should either be filing a 1040 or a 1040NR each year. As today is the filing deadline for the 2007 US tax year (calendar year 2007), you'd better get on with it. Seriously.

(caveat, if you are a non-resident alien, and have no US-source income, there should not be any US tax payable, or any requirement to file - but it's my understanding that you're actually earning out there)

[TeePee]

Don't worry, I filed ages ago and got tax back!

There is a case for voluntary tax, as income tax is unconstitutional. The 16th amendment allows tax on an object, but not a person. Of course, I'm not rich enough to make a case for that!

[schmunk]

There is a case for voluntary tax, as income tax is unconstitutional. The 16th amendment allows tax on an object, but not a person. Of course, I'm not rich enough to make a case for that!

That is, unfortunately, poppycock. Some more interesting stuff here.

[dave87]

Foreign employment "registered with the UK REVENUE" so perfectly legal tax planning!

Question applies therefore only re UK BANK account.

That reply was aimed at a suggestion you should not tell the Inland Revenue, not at your question. (and was before you posted....)

[TeePee]

That is, unfortunately, poppycock. Some more interesting stuff here.

Poppycock? Poppycock!

I didn't mean to suggest that you wouldn't be prosecuted by the IRS, Hence needing far more money to make a case than just paying the taxes.

Look into The Complete Lloyd Long Case.

Believe me, I'm paying my taxes like a good boy, I just find all the messiness rather intriguing!

Personally I'd like a utopian voluntary tax, where you can pay what you like towards different services. $xxx to schools, $xxx to healthcare, etc. It's true democracy. Sadly, like communism, democracy doesn't work.

[SiM]

Personally I'd like a utopian voluntary tax, where you can pay what you like towards different services. $xxx to schools, $xxx to healthcare, etc. It's true democracy. Sadly, like communism, democracy doesn't work.

That's ridiculous! Firstly, it does not fit the definition of tax and secondly 95% of the population would choose to pay 0%. It's not democracy, it's a fail... actually it would be an epic fail



it would be a nightmare, there would be no public schools, no public hospitals, no garbage collectors, no one to maintain the road, etc...

[TeePee]

Look! You managed to put a fail picture from the other thread into a post! Aren't you an intelligent and witty individual! Now everyone can quote your post, with picture and say 'LOL'.

Firstly I accept it wouldn't work, for exactly the reasons you say. Hospitals and garbage collection are paid for privately here (and the service is significantly better!), State Schools are run by the government. But that's a poor example, as the privately run schools are better!

Take something which does have to be run by the government, like the armed forces. The way these things work with a true voluntary tax is simple. It's in everyone's best interest to have your country able to defend itself. So people choose to contribute. I What about state schools? Well if you're poor, your kids are going there. If you're rich, then your workforce are! For the good of the country you want the schools to be good, right? So you contribute there too!

Think for a minute about why it really wouldn't work. Not just that people wouldn't pay, but think about why they wouldn't pay. It comes down to one simple thing. People are greedy, selfish and stupid. And that's also the problem with communism.

[SiM]

Look! You managed to put a fail picture from the other thread into a post! Aren't you an intelligent and witty individual! Now everyone can quote your post, with picture and say 'LOL'.

I don't read/remember every thread, so not sure what other post you are talking about. There is no need for you to try and be insulting. We are all adults here

Firstly I accept it wouldn't work, for exactly the reasons you say. Hospitals and garbage collection are paid for privately here (and the service is significantly better!), State Schools are run by the government. But that's a poor example, as the privately run schools are better!

Take something which does have to be run by the government, like the armed forces. The way these things work with a true voluntary tax is simple. It's in everyone's best interest to have your country able to defend itself. So people choose to contribute. I What about state schools? Well if you're poor, your kids are going there. If you're rich, then your workforce are! For the good of the country you want the schools to be good, right? So you contribute there too!

Think for a minute about why it really wouldn't work. Not just that people wouldn't pay, but think about why they wouldn't pay. It comes down to one simple thing. People are greedy, selfish and stupid. And that's also the problem with communism.

Yup, greed is why it wouldn't work. Also communism does work... look at china, look at cuba... it may not be perfect, but it does work better than your political model