UK/English Tax Q&A

Hey all,

So I am leaving Korea 1st of March, and I have just been told I haven't been paying tax from my salary. The school are asking for a Proof of Residency from the UK HMRC, which they can give to the tax office here in Korea, so that I am exempt. If I do not provide it within one month, I could get charged a lot of back tax in January.

Anyone else been in this situation? How do you get a Proof of Residency?

Any advice helps!

It's easy. You just have to call Inland revenue (the number is on the website) and just ask for one, you just need to tell them that it is for SK and income tax. I got mine a couple of weeks later.

I gave one to my first school. My second school, 9 months on, has never asked for one and I haven't been taxed. Is it likely that I just didn't need another one, or are they going to ask me again? 

Hey I'm a Brit here too and my school did the same, and was confused and lost as you are.

Firstly you'll need a document with a proof of address, such as a utility bill or bank statement (an original one) and a copy of your passport.

Once you have that you have to send it to the UK Embassy in Korea or go there in person. It'll only take a couple of days to process, and it'll cost you about 90,000 KRW

Heres the link to the Embassy website

http://ukinrok.fco.gov.uk/en/

Hope that helps and good luck!

Can someone clarify for me - I didn't bother doing this as I was under the impression that if we don't pay taxes in Korea we should pay tax in the UK on our earnings here. Income tax is much higher in the UK and as a result I didn't bother with the residency certificate and am paying tax on my wages here. I know that US citizens can do this easily as they have to earn a pretty high salary (much more than a teacher here would earn at least!) before they are required to pay taxes in the US on their earnings abroad, but I didn't think the UK had this clause. I can't remember where I heard this though, and now I can't find any information that confirms my suspicion to be true... is there, in fact, any truth in this or am I paying tax needlessly?!

If we can get two years tax-free here AND be exempt from paying tax in the UK then I'll get all over this residency certificate as soon as possible!!

Yes please on the clarification.  If you prove you're a British citizen don't you need to pay British taxes?

tbh, the tax rate is so low here I wasn't bothered to change anything.

as far as i am aware we need this proof of residency letter to avoid paying tax here and in the UK for two years.  the tax office has asked me to submit a self assessment which i admit i have not done so yet... but they did give me this letter to proof i am a resident of the UK. i applied for this before i left the UK in August and had is mailed to me when it arrived in the UK. I don't pay tax here, but am really confused about my situation at home!

If you don't pay tax in Korea then you are legally obliged to submit a tax self assesment form to Inland Revenue. You will then pay the (much higher) rate of tax.

Q2. When I go to live or work abroad, will I continue to pay UK tax?
A2. If you remain treated as resident in the UK for UK tax purposes, normally you will be taxable on your income arising in the UK and overseas. If you are treated as resident and pay tax outside the UK HMRC can give appropriate credit for any tax paid abroad.

If you become treated as non-resident, you will normally only be taxable on your income arising in the UK.

Q3. In what circumstances would I become non-resident?
A3. Normally if you leave the UK to work abroad full-time, you will become not resident and not ordinarily resident in the UK if:

your absence and employment from the UK covers a complete tax year (that is 6 April to 5 April)
you spend less than 183 days in the UK during the tax year
your visits to the UK do not average 91 days or more a tax year over a maximum of four years
From 6 April 2008, days when you are in the UK at the end of the day, that is midnight, are normally counted as days spent in the UK.

http://www.hmrc.gov.uk/cnr/faqs_general.htm#2nr

i am still confused about this.... i don't want to get a huge tax bill when i go home. my recruitment company i am sure advised that we are exempt from tax here and at home for two years. i have no real idea though. has anyone found anything more out?

Ok, that's a bit clearer but still a little confused -

It sounds like it is definitely cheaper to pay tax here rather than in the UK, however, it says (in that quote from HMRC above) that if you are non-resident they will only tax you on UK earnings (which is nothing in our cases, right?) Does that mean that if you are non-resident in the UK while also using the tax exemption thing that you wouldn't have to pay tax in either place? Or is it that (as I suspect) it simply stops you from having to pay tax twice - that you must pay in one country or the other?

Thoughts?

Yeah, i believe we dont get anything back! But we have state pension! the Americans don't, i don't think! ! so they kinda need it, whereas our government (uk) already take care of us when we are older. Although it is not good that we can't add the pension here to the Uk one!

Does anyone have an example of these 'residency certificates'?

I'm Irish, and got mine sent out last year, but didn't lodge it with my admin office because I saw that I wasn't paying tax off my paycheck, so assumed I never would. Now i'm being asked to pay tax, which is fair enough, but when I showed my admin office my residency certificate they turned it down.

Basically mine says 'The above named was resident of Ireland for the years 2008 and 2009.' That's true - I came to Korea in February 2010. So my office are saying I was citizen of Korea in 2010, so should pay taxes here. My taxes are only working out at around 300,000, whereas some teachers are paying 2,500,000, so i've got it comparatively easy. Anyone have a similar problem with the certificate?

Also, i've been told that if you spend less than 25% of your paycheck on your check card, you don't get tax credits. I spent 4,300,000 on it last year, according to my 신용카드 사용 금액 확인서, which is around 23%, so i'm not getting any credits, according to my co-teachers.

Does anyone have an example of these 'residency certificates'?

I'm Irish, and got mine sent out last year, but didn't lodge it with my admin office because I saw that I wasn't paying tax off my paycheck, so assumed I never would. Now i'm being asked to pay tax, which is fair enough, but when I showed my admin office my residency certificate they turned it down.

Basically mine says 'The above named was resident of Ireland for the years 2008 and 2009.' That's true - I came to Korea in February 2010. So my office are saying I was citizen of Korea in 2010, so should pay taxes here. My taxes are only working out at around 300,000, whereas some teachers are paying 2,500,000, so i've got it comparatively easy. Anyone have a similar problem with the certificate?

Also, i've been told that if you spend less than 25% of your paycheck on your check card, you don't get tax credits. I spent 4,300,000 on it last year, according to my 신용카드 사용 금액 확인서, which is around 23%, so i'm not getting any credits, according to my co-teachers.

yes, that's true--you have to spend 25% or more of your total income to be eligible for the tax deduction, which has a limit of 3 million WON.

Won't work. You need indefinite/very long work contract + I have ties like family and property in Canada. Thanks for advice. :)

I planned on getting my residency certificate for the UK before coming out to Korea but my tax office was messing around a lot and I couldn't get it in time. That was a year ago. My question is: will I be charged double tax at, home and in Korea? Or is it a case that I have to prove to the UK tax office that I have been paying taxes here in Korea, and so I won't have to pay tax on income AGAIN when I return to the UK?

Thanks for the post btw, Daejeon. This is really the first time things have been clearly laid out for me, tax-wise, since I came here..

Hi,
      I'm being pushed to find a document that's issued by a British tax office to 'prove British residency' yet I've not been told what I need. Will a P45 suffice or should I be looking for something else? I'm wasting so much potential lesson-planning time having to look for this stupid thing. Any help would be appreciated!

Cheers

You need to get a residency certificate, it's really easy though...just go on the embassy website and it'll tell you what you have to send them! From what I remember its a utility bill with your UK address on and your passport. It costs about 90,000 won inc postage I think? Hope this helps!

Cheers for the replies!

I can't be bothered to do it via post so I'm gonna go on Saturday. I'm gonna ring in advance to find out what they need to see. Do you think a scanned print-out of a utility bill would be ok?

Also, the embassy's switchboard number is listed as (+82) (2) 3210 5500. How do I dial that? Do I cut off the +82 and just use 2 3210 5500?

All you need is a p45 or p60 if you have one. It just needs to have your home address and the tax office's address (which should be on the P45 / P60). I came in September last year and  handed in my P45 and I haven't had any problems so far (touch wood). I didnt get the certificate of residence because it'll only cause problems with tax etc when I go back. Hope that helps.