Possible Income from Overseas

[The Soup Dragon]

I am in need of some advice / guidance regarding a possible payment from overseas ( New Zealand).
I am currently living working and paying tax in the UK but have been offered payment for some work I do ( managerially) for a NZ company. I have an enduring realtionship from NZ and the NZ company accountant has said this payment would be taxed in NZ ie I would pay NZ IRD. How do I deal with that from a HMRC point of view? Does it need to be declared and taxed again in the UK.

Dont know whether to take the payemnt or explore other avenues ( circa £10K)

Cheers SD

 

[Chris Ashdown]

Ask them if they will accept a UK invoice for your services and pay it into a UK bank

 

[The Soup Dragon]

This isn't possible

 

[AndyICAEW]

I'd contact an accountant - better safe than sorry.

 

[danielrobert48]

You should consult any accountant in UK and tell him the whole situation that will guide you better according to country's law.

 

[Gecko001]

Maybe your friend is a sheep farmer as he comes from NZ. Are you sure he is not a low-flying pig farmer.

Not a chance.

 

[The Soup Dragon]

Ask them if they will accept a UK invoice for your services and pay it into a UK bank

Hi Chris

Just thinking about this a bit more. My spouse has recently registered self emplyed and could provide an invoice for this work. Does that sound feasible?

 

[StevensOnln1]

Your spouse would need to then pay you for the work done. Otherwise HMRC would view it as tax evasion, by shifting your income to another person.

 

[The Soup Dragon]

Your spouse would need to then pay you for the work done. Otherwise HMRC would view it as tax evasion, by shifting your income to another person.

Ok not sure why. My wife has done some subcontracting to this company before. She could put an invoice in and declare that in the UK surely?

 

[StevensOnln1]

Shifting income earned by one person to another person is tax evasion. Your wife would also be in breach of the national minimum wage if you carried out the work but she invoiced the company and didn't pay you for it.

 

[The Soup Dragon]

Shifting income earned by one person to another person is tax evasion. Your wife would also be in breach of the national minimum wage if you carried out the work but she invoiced the company and didn't pay you for it.

Ok I am not disputing what you say I am just trying to find out what is possible within the rules. How easy is it to declare on a tax return money earned from overseas?

 

[StevensOnln1]

You would need to fill out the foreign income page on your tax return.

 

[The Soup Dragon]

You would need to fill out the foreign income page on your tax return.

OK and if I had paid some tax on that in NZ would that be taken into account?
If I dont take this payment until early next month I take it goes on next years tax return in 2014? As you can see I am a bit green with all of this.

 

[StevensOnln1]

You'd have to check the tax treaty between UK and NZ. Income earned between 6th April 2013 and 5th April 2014 goes on your 2013/14 tax return, due by 31st January 2015 if file online.

 

[The Soup Dragon]

You'd have to check the tax treaty between UK and NZ. Income earned between 6th April 2013 and 5th April 2014 goes on your 2013/14 tax return, due by 31st January 2015 if file online.

Thankyou

I think I will employ an accountant to file my tax return as it scares the hell out of me

 

[teddys]

I am in need of some advice / guidance regarding a possible payment from overseas ( New Zealand).
I am currently living working and paying tax in the UK but have been offered payment for some work I do ( managerially) for a NZ company. I have an enduring realtionship from NZ and the NZ company accountant has said this payment would be taxed in NZ ie I would pay NZ IRD. How do I deal with that from a HMRC point of view? Does it need to be declared and taxed again in the UK.

Dont know whether to take the payemnt or explore other avenues ( circa £10K)

Cheers SD

The first point to check is whether you're tax resident in the UK during the year in which you earned this income. If you're tax resident normally you're liable to pay UK tax on your worldwide income and gains. So if you as an individual are tax resident in the UK and are in receipt of any income in NZ you're liable to pay UK tax (subject to an exception below). However, any tax that you have paid in NZ could be set against your UK tax liability. UK tax laws allow unilateral tax credit in most cases even where there exists no treaty provision.

Now, if you're not domiciled in the UK and have been resident in the UK for less than 7 years you could opt for the NZ income to be taxed on 'remittance' (taxed when it's brought over to the UK) basis rather than on 'arising' basis (taxed in the year it arises) without paying any remittance basis charge. If you've been resident in the UK for at least 7 years or more then you will need to pay a charge (£30,000/£50,000) if you with to claim remittance basis.

The rules surrounding 'tax residence' are pretty clear from 06 April 2013 on, which was not the case until last year. If your tax affairs are complicated (non-domicile, multi-jurisdictional tax affairs etc etc) it is better to consult an accountant.

Hope this helps.

 

[The Soup Dragon]

The first point to check is whether you're tax resident in the UK during the year in which you earned this income. If you're tax resident normally you're liable to pay UK tax on your worldwide income and gains. So if you as an individual are tax resident in the UK and are in receipt of any income in NZ you're liable to pay UK tax (subject to an exception below). However, any tax that you have paid in NZ could be set against your UK tax liability. UK tax laws allow unilateral tax credit in most cases even where there exists no treaty provision.

Now, if you're not domiciled in the UK and have been resident in the UK for less than 7 years you could opt for the NZ income to be taxed on 'remittance' (taxed when it's brought over to the UK) basis rather than on 'arising' basis (taxed in the year it arises) without paying any remittance basis charge. If you've been resident in the UK for at least 7 years or more then you will need to pay a charge (£30,000/£50,000) if you with to claim remittance basis.

The rules surrounding 'tax residence' are pretty clear from 06 April 2013 on, which was not the case until last year. If your tax affairs are complicated (non-domicile, multi-jurisdictional tax affairs etc etc) it is better to consult an accountant.

Hope this helps.

Thanks Teddy

I live and work and pay tax in the UK and am a director of a company here.
I lived in NZ for 6 years came back to the UK in 2010. I have a business interest in NZ and this hasnt paid me anything until now. Now that business is looking to pay me some money ( circa NZ$20000) but NZ IRD insist that that will have to be taxed under the NZ IRD scheme. I am assuming that I can just declare this as income on my tax return in the UK on the overseas page and pay any extra dues that might be payable?