Reply to: Plan B?

[AtW]

ok thanks. So it seems in effect taxes got reasonably harmonised around europe, which is a good thing. Now if only they closed offshores live would be

[expat]

ok, so it follows that UK personal taxation is not that much worse than around Europe and it would only make sense to be tax exile if you spend this time in some offshore like Isle of Man?

IMHO it isn't worse, it's better than quite a few. It does have some differences: the very few tax bands being one, and the high employer's NI being another.

[AtW]

ok, so it follows that UK personal taxation is not that much worse than around Europe and it would only make sense to be tax exile if you spend this time in some offshore like Isle of Man?

[expat]

But surely taxation in Europe is lower, so why won't you pay tax in the place where you work and not UK? I appreciate you must have very carefully considered it, I am just curious on reasons why not.

Taxation in Europe is not necessarily lower. There are only a few places where total tax bite for someone in my/our position is lower (total tax bite = employer's NI + employee's NI + income tax: there are pretty exact equivalents in most places).

Also because there isn't "the place where I work", it is different with each contract. And to get the non-resident advantages of, say, Netherlands or Switzerland, you have to be non-resident there, i.e. resident elsewhere.

Right now I'm in Spain and enjoying it but I really don't want to pay their tax instead.

And I am ready to be UK-resident, to get a mortgage, sometime.


The overall tax bite is higher in most places, but that just means that the same would apply there. Only it applies especially in the UK because of the sudden jump in tax rates (in France, for example, it's higher but so fine-grained that there is no single point at which you might decide it's suddenly not worth any more).

[AtW]

I've changed my view on that as soon as I started paying substantial amount of tax (40% rate is IMO a bit too high).

[meridian]

But surely taxation in Europe is lower, so why won't you pay tax in the place where you work and not UK? I appreciate you must have very carefully considered it, I am just curious on reasons why not.

That might be construed as a tax minimisation scheme....

[AtW]

But surely taxation in Europe is lower, so why won't you pay tax in the place where you work and not UK? I appreciate you must have very carefully considered it, I am just curious on reasons why not.

[BlasterBates]

...the trouble is AtW that either expat pays tax for the full year in that EU country or he splits it. If he splits it the IR will request 40% because the UK includes your overseas earnings in calculating the tax rate, though they don't tax the overseas earnings it shoves up your tax rate on UK earnings.

[expat]

expat - if you work so long outside of UK, this should make you tax exile as far as UK is concerned (I think you have to live here for 183 days per year), and days of departure and arrival are counted towards time spend outside of UK. Thus 40% tax should not apply.

183 days in any given year, or 91 days per year average over 4 years.

But that's not the point: the days of not being resident anywhere are gone. And I'd still be travelling every week. And I want to get a mortgage....

[AtW]

expat - if you work so long outside of UK, this should make you tax exile as far as UK is concerned (I think you have to live here for 183 days per year), and days of departure and arrival are counted towards time spend outside of UK. Thus 40% tax should not apply.

[expat]

It's only fair that I sould point out that I made a bad mistake in my calculation, and I'd actually take home twice that. Still...

[DimPrawn]

Under new laws being passed they can give you a "deemed salary" and take the tax you would have paid if it were not for the fact that you are not working.

It's only "fair" you "silly contractors".

[expat]

Expenses of €700 a week?

'nani must be cheap man!!!

That's a good point too: I´'ve been trying to keep the expenses down, but why bother? After 26 weeks, work for taxis and 5* hotels.

[expat]

"Taking time off should be classed as tax evasion a Labour "think tank" has proposed this week...."

Only a matter of time.

That's exaclty what I have in mind. They can't tax what you don't earn.

Can they??

[DimPrawn]

Just done a quick spreadsheet. My going rate is about 550 Euros a day. I live in the UK and work in the EU/CH: I can keep expenses down to 700 Euros a week (hotel, flights, taxi or parking). Work out NICs and tax on the rest, and something interesting happens: At about 26 weeks I cross into 40% tax, and after that I take home just 80 pounds a day. I might just rather have half the year off.

"Taking time off should be classed as tax evasion a Labour "think tank" has proposed this week...."

Only a matter of time.