MYTHS ABOUT UK TAXATION
MYTHS ABOUND ABOUT UK
TAXATION OF EXPATRIATES
SUCH AS:

“I’ve been in the UK for less than 183 days therefore I won’t be taxed in the UK”.

 

True, there are instances when you may not be taxed in the UK if you are here for less than 183 days, but certain conditions need to be satisfied and often these are not met. In a lot of cases, the individual is taxable in the UK even though they are in the UK for less than 183 days and may not be tax resident.

“I’m paid in my home country, therefore, I won’t be taxable in the UK”.

 

Where you are paid does not generally determine what is taxable in the UK (Only in certain situations will this be important). The UK taxes on a source basis, therefore, if you are carrying out work in the UK, this is taxable in the UK no matter where you are paid from or by whom.

“I’m not working in the UK, therefore I’m not taxable in the UK”.

 

If you normally live in the UK and are not absent from the UK for a certain amount of time or retain ties with the UK, you may remain taxable in the UK on your worldwide income, possibly being in a double tax situation where you are taxed twice on the same income.

“My secondment is only a few months, therefore, will be very simple and won’t cause any tax issues”.

 

Short assignments, as well as short periods of time overseas, often cause the most problems, with double tax issues arising because say UK tax residence hasn’t been broken, but the individual has become resident and/or taxable in the country they are visiting

“I’m leaving the UK and therefore, won’t need to pay UK tax.”

 

A common misconception with Brits leaving the UK. Depending on your circumstances, you could well remain taxable in the UK even if you are not a UK tax resident.

Such myths can cause the unwary to get into trouble with the tax authorities and can incur large tax bills, which include penalties surcharges and interest. In the UK, these penalties can be up to a 100% of the outstanding tax due (up to 200% in certain circumstances).

Beware of friends or associates who try to advise you on your tax situation, as so often what is suitable advice for one person is not suitable for another.