New April 2011 Tax Laws in UK Re Xpats !

[outsider]

Point of interest : If your non resident you are not allowed to claim UK SED.

Is not actually correct, it seems to be up to interpretation by the IR. I’m Expat and have been for 5yrs and the taxman refused me a NT code. I’m fully registered as Expat with the uk taxman they have my address overseas and I claim SED online no problem. (I also have no center of interest as its been described in the uk)
When I spoke with them regarding the non issue of an NT code I was told by the IR to claim SED 🙄 as they would not issue the NT code because I might! work in a UK Taxable location 😕
The issue apparently being I’m staff paid by the UK office even though I don’t set foot in the UK ❗
All being said it would appear that it is their bat and ball and they will change and interpret the rules to suite themselves.
As clear as mud as they say 🙁

[James McLauchlan]

For those that wish to know a bit more about UK Tax Codes:
‘NT‘ (in effect) means No Tax Deducted at source.

From HMRC Website: http://www.hmrc.gov.uk

NT means you mustn’t deduct any tax from their pay.
Note: Only refund any tax deducted from an employee before the issue of an NT code when HMRC tells you to operate it on a cumulative basis.

Source: http://www.hmrc.gov.uk/paye/intro/tax-codes.htm#2

outsider
Thanks for busting that particular SED myth with some solid irrefutable info. I’m sure that may be of interest to some people around here.

So, is it fair to say that an employee would normally be deducted at source (similar to PAYE) by their UK based employer and each year they would have to claim SED even though they are clearly ex-pat in all sense of the term?
Would they still making Class 1 NI contributions (also deducted at source) to protect their UK pension?

Stating the rather obvious, one would assume that, with an NT code, no tax would be deducted at source by the employer and therefore claiming SED would not be required either. Life would be a lot easier.

[Anonymous]

Being a UK resident is a prime condition for claiming Seafarers’ Earning Deduction. Unlike many tax rules this is clear and unambiguous and certainly not open to "interpretation" This is the first rule under General Conditions. This will change in April 2011 when resident in Europe will apply.

Individual dealings with the IR do no always reflect the standard policy. I feel one isolated case in thousands doesn’t exactly warrent the statement "busting that particular SED myth with some solid irrefutable info" Its interesting to note that Outsider has been refused an NT tax code, after clearly qualifying for one. Again I wouldn’t assume this is general practice or policy from the HMRC. I suspect the HMRC have good reason for dealing with Outsiders case in that way, but that doesn’t mean everyone.

Outsider: I’ll bet you get paid from Singapore and not from a UK office these days too…

[outsider]

225 I’m afraid not I’m paid from Aberdeen:

In my dealings with the taxman regarding obtaining an NT code their stance was one of I might work in a UK taxable zone and as such they would not issue an NT code.
My accountant at the time could not understand why an NT code would not be issued and the only explination I got from the IR was the one above about possibly working in a UK taxable zone.

As I’ve already stated they have my overseas address on file as primary residence ❗

And in all my dealings with them regarding SED my non residency status has never come up.

I specifically enquired about claiming SED as an expat as I am aware of the ruling you are refering to and all I can say in my case was I recieved advice from the IR to contunue claiming as normal 🙄

If there was some other mitigating circumstance involved niether I or my accountant at the time have any idea, but then that just about sums up tax law and its enforcement ❓

[liddelljohn]

Basicly the HMRC are in a total shambolic mess anyway , one hand does not know what the other is doing and different tax offices interpret the rules differently ..there is NO consistancy ….they investigated me last year and i told them to take it to court …they backed off as my Lawyer pointed out 7 different demands all contradicying each other among other errors ,such as other peoples codes and demands for tax for jobs that i had not even worked on due to an ageny having incorrect records.

[Pete]

By having a UK bank account will not make you become a Resident from NON Resident Status.

Alone, on it’s own, you may be correct but….. if you are ever investigated by HMRC consider this…

OK
You are a UK Citizen.

You still have a UK bank account that is active (in even a small way) and pays some bills, pension, on-line shopping, whatever.
You still have a UK credit card which you use.
You still have a UK driving licence.

For your convenience, your banks statements go to your Mum and Dads UK address
The billing address for your credit card is the same UK address.
Your UK driving licence is registered to the same UK address.

One day HMRC decide to investigate you for some reason.
They may well decide that you have long term ties to the UK and therefore are resident for tax purposes, plus they might decide you have been liable for years and claim many years back tax is owed. The 90 day rule will mean jot in the above scenario!

That could hurt!!

It’ll all end in Beers!

Hi Jamesmc,

With regards to your points made on above post, I would appreciate your view on my situation and recommend what further action I should take.

I have been Non-Resident for 3 years now, and HMRC issued me an NT code a few months after I left UK. I bought a house here with my wife and have permanent resident status also.

At time of leaving the UK in 2008, HMRC/CNR said in a phone call that it was okay to keep bank account/credit cards in UK with a correspondence address. I did this but have just read your post and was concerned.

1. Is it ok to keep UK bank account if the bank agrees to use my overseas address?
2. Same question for credit cards?
3. UK driving licence. I did read on directgov website that there is no need to surrender a UK licence if moving abroad. My driving licence is registered at a friend’s address back in UK and nothing else is sent there.

As for bank account, my company pension gets paid in and I have 2 direct debits for investments which will stop next month. I am arranging to have my investments moved to an offshore division of Barclays.

[Anonymous]

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[Author]

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