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Career Venue => Contract, and Job Related Issues => Topic started by: cridgey on December 24, 2010, 10:45:09 am

Title: UK/English Tax Q&A
Post by: cridgey on December 24, 2010, 10:45:09 am
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!
Title: Re: UK Tax Proof of Residency
Post by: pablohudson on December 24, 2010, 10:51:11 am
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.
Title: Re: UK Tax Proof of Residency
Post by: vitamin-d on December 24, 2010, 10:53:07 am
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? 
Title: Re: UK Tax Proof of Residency
Post by: jpscorpio on December 24, 2010, 10:56:35 am
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!
Title: Re: UK Tax Proof of Residency
Post by: hwana on December 24, 2010, 11:10:04 am
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!!
Title: Re: UK Tax Proof of Residency
Post by: RufusW on December 24, 2010, 11:17:59 am
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.
Title: Re: UK Tax Proof of Residency
Post by: sambelina78 on December 24, 2010, 11:39:07 am
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!
Title: Re: UK Tax Proof of Residency
Post by: creeper1 on December 24, 2010, 12:13:26 pm
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.
Title: Re: UK Tax Proof of Residency
Post by: vitamin-d on December 24, 2010, 12:19:27 pm
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
Title: Re: UK Tax Proof of Residency
Post by: sambelina78 on January 10, 2011, 03:00:16 pm
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?
Title: Re: UK Tax Proof of Residency
Post by: tomston on February 10, 2011, 02:21:23 pm
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?
Title: Re: UK Tax Proof of Residency
Post by: mikey85 on February 16, 2011, 06:20:06 pm
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!
Title: Re: Help with Korean Taxes
Post by: taebaekluke on February 23, 2011, 03:38:41 pm
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.
Title: Re: Help with Korean Taxes
Post by: Davey on February 23, 2011, 06:25:28 pm
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.
Title: Re: Help with Korean Taxes
Post by: anigerla on February 24, 2011, 08:47:55 am
Won't work. You need indefinite/very long work contract + I have ties like family and property in Canada. Thanks for advice. :)
Title: Re: Help with Korean Taxes
Post by: Rutten on March 02, 2011, 01:57:47 pm
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..
Title: FAO Brits (question regarding tax)
Post by: atmosphere on April 13, 2011, 09:53:23 am
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
Title: Re: FAO Brits (question regarding tax)
Post by: Rosieee on April 13, 2011, 09:57:56 am
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!
Title: Re: FAO Brits (question regarding tax)
Post by: atmosphere on April 13, 2011, 10:11:56 am
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?
Title: Re: FAO Brits (question regarding tax)
Post by: Moomoo on April 13, 2011, 10:55:18 am
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.  ;D
Title: Re: FAO Brits (question regarding tax)
Post by: DevilMogun on April 13, 2011, 11:59:52 am
I've never had a certificate of residency and I've been here 2 years.  I did phone the tax office when I first arrived and they wanted an address in England - ie a residence.  I didn't have one and hadn't lived in the UK for a couple of years so they said I'm not a resident then.  Hard to argue with that really.  I told my school, thinking that it would mean my 2 year tax free period would be affected but they said 'nahh 'ts ok'.  I got my 2 years tax free, I now pay Korean tax and I have no idea what my position would be if I went back to the UK, but as I don't plan to I don't really care.

I'd still be interested to know what it's all about though and what happens to you Brits who are trying to get the certificate.
Title: Re: FAO Brits (question regarding tax)
Post by: Eros on April 13, 2011, 12:16:21 pm
I had an accountant back in England and suffice to say the tax position is a minefield. There is a common misconception that if we have  a residency certificate we are exempt from taxes in Korea and in England. That is not true. If you are earning an income, you should be paying taxes to someone somewhere. The double taxation treaties in effect are there to ensure that you don't get taxed in England and in Korea. Not that you don't get taxed in any.

As I say there are a plethora of rules and you will have to research it yourself. It is true though that if you do not pay taxes in Korea, you will have to pay taxes on your Korean income at the UK rate. If however you leave the UK indefinately (for a few tax years) and have no ties to the UK (Income, housing etc) then you can pay taxes in Korea only. You should file a P85 I think with the tax office back in the UK. There are no hard and fast rules, each case depends on its own facts. The information is readily available from the tax office website. So have a browse.
Title: Re: FAO Brits (question regarding tax)
Post by: tbhscot on April 13, 2011, 02:03:35 pm
i got my parents to contact the tax office back home about this and they said that because i wasn't contacting them in myself they could only send me a letter confirming my national insurance number. it obviously had my home british address on it. i submitted that with some application form and everything was fine.
Title: Re: FAO Brits (question regarding tax)
Post by: auster on April 13, 2011, 02:07:13 pm
I filled in a P85, sent that to my tax office. They gave me a double taxation relief form but didn't explain who I give this to. As for the cert of residency, I applied for one in early Feb, still no sign, which really f#$ked thing up for me out here in Korea. My school ask for it every week, but still no sign. Wish they could've said just take your last p45, pay the lower tax here, make sure you fill out the double taxation relief form to avoid paying UK tax on your return and that'll be it.

HMRC are peerless f#$cking incompetents.
Title: Re: FAO Brits (question regarding tax)
Post by: gangwon on April 13, 2011, 02:14:26 pm
I sent off my P85 before leaving England which entitled me to a tax refund as I wasn't completing a full tax year in the country and applied for proof of residency at the same time. For proof of residency I just sent them a letter asking for one with my address and NI number and they sent me a letter about 3 months later. It then got lost in the post coming from the UK to here and I eventually gave it to the school after about 6 months. The school didn't tax me during that period.

I have no idea what will happen when i get back after 2 years here, but surly HMRC have no way of knowing how much I earned over here, so how can they tax me, (unless i tell them the truth!)

As fo paying the 3% tax here, have a search around Waygook, the tax went up a lot last year. You're now taxed on extras like housing, flights, settlement etc plus about 15% after threshold. Lots of people were paying around 2 mil lump sum last year.

Charlie
Title: Re: FAO Brits (question regarding tax)
Post by: fudoose on April 13, 2011, 02:19:11 pm
dont bother with the embassy, waste of time, look its really simple, write a letter to your local tax office, saying your name, address, and that you want proof of residency.. about 6 weeks later they will send a really shit looking handwritten letter with a signature saying " your name, lives at that adress.. you gotta love the efficiency. It's a giant ball-ache but will prob save you 400 quid over a year, which ain't much.. but..
Title: Re: FAO Brits (question regarding tax)
Post by: ajw on April 13, 2011, 02:24:49 pm


The rudest customer service I've experienced in my whole time in Korea was at our Embassy in Seoul - a total disgrace. Totally mitigated the joy and (sort of) being back on British soil!
Title: Re: FAO Brits (question regarding tax)
Post by: willinkorea on April 13, 2011, 02:43:46 pm
It took over 6 months to get my Certificate of Residency from the HMRC - which, as pointed-out earlier, looks only marginally more official official than something one of my 6th graders could have cobbled together...

The deal is that, yes, you need to pay tax in one of either Korea or Britain. Getting the tax residency certificate means you're not ordinarily resident in the UK, and so not liable to UK tax, only Korean tax. This is much lower than in the UK, so worth ensuring you're eligible for. As a bonus, Brits (and some other citizens) employed within the state school system (ie with EPIK or GEPIK) enjoy a two year tax free period here if they can prove residency within Korea for tax purposes. So, all round, worth pursuing, despite the significant hassle.
Title: Re: Tax Changes
Post by: Suza on May 25, 2011, 11:20:29 am
Thanks for your reply!

I am British. I worked here from October 2008 - 2010 and it was indeed a tax free haven.

Now, I'm come back they say it changed in 2010 December. I don't believe it at all!

Are you sure that you simply no longer qualify for tax-exemption?  Since you have worked in Korea for two years (in a tax-exempt situation) then technically your two-years-of-tax-free-status has expired.

No, because I took a 5 month break and went home and travelling. I only came back again in March - so the year begins new.I'll call the NTS help line later.

It doesn't matter when it was, you're only eligible for a tax exemption for your first two years in Korea - not two years in total.  Even if you paid tax in your first two years, you'd still have to pay tax if you've been here longer than that.


I'm sure that it begins anew. I had to get a new visa etc. Anyway, theres no point in all this speculating. I'll phone the NTS later. I'll report back what they say incase anyone else is having the same troubles,
http://www.nts.go.kr/eng/help/help_01.asp?top_code=H001&sub_code=HS01&ssub_code=HSA1
Title: Re: Help with Korean Taxes
Post by: Incredagogue on May 25, 2011, 11:48:41 am
I don't know if this is too far down for anyone to notice/care anymore but here goes:

I was having a hell of a time getting a straight answer on my taxes. Teachers, office admin, even the NTS hotline gave me confusing and varying answers. I ended up visiting a tax office in person (the Gangnam-gu one to be specific). They had the entire basement set up to assist with tax filings. I literally sat there while a Korean went through the whole process for me. It was very quick (15 minutes) and now I have no worries about having made a mistake, or not filed correctly.

Hope this helps!
Title: Re: Tax Changes
Post by: ame on May 25, 2011, 12:37:21 pm
Anyway, theres no point in all this speculating.

You started it.

Anyway, my contract (EPIK) states in article 13.5 that  "If the Employee has already worked more than two years in Korea, he/she shall not be eligible for tax exemption."

Seems pretty clear to me.
Title: Re: Help with Korean Taxes
Post by: Suza on May 25, 2011, 08:59:03 pm
Not all teachers are on the same contracts. I work for Gunpo which doesn't fall under GEPIK or EPIK.

My coteacher was also surprised at the recent change and she knew nothing about it until the admin office mentioned it to her today. She has worked with native teachers for 5 years.

My friends who work for GEPIK (and less than 2 years) have also not heard anything about the tax changes as of December 2010.

The admin office initially wanted to take a lump sum out at the end of my contract. This lump sum would be somewhere in the region of 2 million.

The admin office has not once mentioned my prior 2 year employment in Korea - with a 5 month break out of the country (not on any contract).

The point of my OP was not to question my 2 year prior contract and my eligibility for tax exemption it was to ask fellow teachers whether they have noticed any tax deductions since last December.
Title: [Brits] - Taxes on returning home?
Post by: Darkeru on June 13, 2011, 06:58:35 pm
Do any of my fellow Brits know the tax situation when we return home, without spending a whole tax year (April - April) in Korea?
Title: Re: [Brits] - Taxes on returning home?
Post by: Klogical on June 13, 2011, 07:07:54 pm
what dyu mean?

gettin back pension etc
having to pay uk people tax?
or what people in uk are currently gettin taxed?

if its pension i dunno pal, as far as i understand koreans are required to pay national insurance in the uk and they get naff all back, consequently we dont get any of those pensions contributions back

if its about payin the inland rev. i'd keep quiet lol - ive not read anywhere of them asking you to pay ,, nor anyone payin lol

as far as uk ta sitch is concerned we are bafoooxed mate.. a lot  of the new regime kicked in in may and inflations quite high (compared to what we know)  ... people are feeling the wage pinch right about now

Title: Re: [Brits] - Taxes on returning home?
Post by: Darkeru on June 13, 2011, 07:17:34 pm
Having to pay the UK people tax. I heard that generally people who stay away for a whole tax year are excempt from paying UK taxes on money earned abroad, but I'm not sure how much/what happens/what the process is for people who spend less than that time abroad.
Title: Re: [Brits] - Taxes on returning home?
Post by: Katherine84 on June 13, 2011, 07:21:52 pm
Hi,
If you haven't spent April - April away from the UK then you are still classed as a 'resident' and as such you should pay full tax on your earnings to the Inland Revenue ( I checked this out with them). However, I've never heard of anyone who's actually had to do it, so if you keep quiet you should be fine! Just don't go shouting to them about what you earned this year!
Title: Re: [Brits] - Taxes on returning home?
Post by: Klogical on June 13, 2011, 07:24:05 pm
what process?

only one i can think of is self assessment....

what would you do if you brought nothing back and spent all your cash here?

they dont know anything - its not like gunna nz or oz and gettin an inland rev cert before you go..

id just keep quiet ive not read or seen a dingle about giving them a penny... im pretty certain your not required to pay anything - and if you are what you bring back will be well under the radar.....

what you mite get if you do start payin tax is a letter sayin u are behind on NI payments asking you to make a voluntary payment to top it up (bo**ox to that)......
Title: Re: [Brits] - Taxes on returning home?
Post by: Klogical on June 13, 2011, 07:24:58 pm
Hi,
If you haven't spent April - April away from the UK then you are still classed as a 'resident' and as such you should pay full tax on your earnings to the Inland Revenue ( I checked this out with them). However, I've never heard of anyone who's actually had to do it, so if you keep quiet you should be fine! Just don't go shouting to them about what you earned this year!

listen to katherine84 lol
Title: Re: [Brits] - Taxes on returning home?
Post by: Darkeru on June 14, 2011, 07:40:20 am
Sounds like Katherine is the one to listen to - what I'm worried about though is I already sent a form a while back saying what I was doing abroad, since I was planning to (and still might be) staying two years.
Title: Re: [Brits] - Taxes on returning home?
Post by: Klogical on June 14, 2011, 08:07:25 am
Sounds like Katherine is the one to listen to - what I'm worried about though is I already sent a form a while back saying what I was doing abroad, since I was planning to (and still might be) staying two years.

what form did you send? why did you send it lol? -- i wudnt tell them anything!!!

only thing i would worry about by doing stuff like that is ur student loan... if they work out your overseas theyl have you paying the oversears rate ... because your not tagged to earnings in uk or anything- - or they might want their cut all up front.... i dunno mate - ive never never heard of anyone from uk paying tax
Title: Re: UK/English Tax Q&A
Post by: sw712 on June 15, 2011, 11:59:44 am
I applied for a certificate of residency before I cam to Korea (Feb 2011) and was denied it. I also sent off a P85 to tell HMRC that I was leaving the UK and got my tax refund last week.

However, I have not paid income tax in Korea yet and have been told that it will start from this month. I have also been told that all Koreans have to pay extra tax in January as they do not pay enough monthly, is this the case? Has this happened to anybody else? My Co-teacher tried explaining it to me but was struggling with the language barrier a little, and told me I should find out the situation for myself. I'd be really peed off if I pay income tax every month AND get stung with a bill in January
Title: Re: UK/English Tax Q&A
Post by: Rutten on June 15, 2011, 12:27:35 pm
i was under the impression that we pay less tax here in korea so the whole 'proof of residency for the UK' thing was a pointless exercise, and doesn't benefit us because we'll pay more when we get to the UK. - Is this the case?

I pay tax every month here as opposed to a big lump sum. Apparently I pay a pitiful amount of tax (1-2% of my income) :S I'm not sure if I'm gonna get stung with a bill when I leave Korea.. What do you think?
Title: Re: UK/English Tax Q&A
Post by: laurateacher on June 15, 2011, 01:15:08 pm
OK I'm really confused.  I never signed a P85, I think I only pay taxes here......So I should sign a P85?  I'm scared to do this as then student loans will find me!!!!!

Anyway, just to stray a little, 2 of my friends just left here and went back to the UK, and they were told because they have a huge gap in their NI contributions they are not entitled to use the NHS for free or neither will they receive a pension when they retire.  Despite my friend now working and paying taxes there.  I'm not sure if that info is actually true or they were told the wrong info.....
Title: Re: UK/English Tax Q&A
Post by: flasyb on June 15, 2011, 01:24:52 pm
This might be of use. http://www.hmrc.gov.uk/cnr/faqs_general.htm

Relevant part.

"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."
Title: Re: UK/English Tax Q&A
Post by: flasyb on June 15, 2011, 01:34:40 pm
Then it gets confusing again. Confusing part in bold.

"Q13: In what circumstances will I be treated as a UK resident for UK tax purposes?
A13: To be treated as resident in the UK you must normally be physically present in the country at some time in the tax year. You will always be treated as resident if you are here for 183 days or more in the tax year. There are no exceptions to this. You count the total number of days you spend in the UK - it does not matter if you come and go several times during the year or if you are here for one stay of 183 days or more. If you are here for less than 183 days, you may still be treated as resident for the year if you visit the UK regularly and your visits average 91 days or more a tax year over a period not exceeding 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."

According to this, I might be considered a resident. Which means I might not. Which makes things no clearer. Sorry guys. This will have been of little use unless you have been away from the UK for 4 years and spend on average less than 3 months a year there. If the latter is the case, congrats, no tax for you when you return. At least that's how I read it.
Title: Re: UK/English Tax Q&A
Post by: Rutten on June 15, 2011, 01:59:06 pm
i.e. If you are not a resident of the UK, that is you didn't present proof of residency when you came to korea and you meet the above criteria, you are only subject to Korean taxes as none of that income occurred in the UK.

Korean taxes are lower than the UK's taxes so it is therefore beneficial to become a non-resident of the UK for tax purposes by not presenting this troublesome 'proof of residency'.

Is that logic sound?
Title: Re: UK/English Tax Q&A
Post by: flasyb on June 15, 2011, 02:16:11 pm
i.e. If you are not a resident of the UK, that is you didn't present proof of residency when you came to korea and you meet the above criteria, you are only subject to Korean taxes as none of that income occurred in the UK.

Korean taxes are lower than the UK's taxes so it is therefore beneficial to become a non-resident of the UK for tax purposes by not presenting this troublesome 'proof of residency'.

Is that logic sound?

Even if you present the proof of residency you might not count as a resident in the UK when you return. The residency certificate will show that you were a resident when you applied for the certificate but after a tax year abroad, you might no longer count as a resident, thus avoiding taxation in either country. You were a resident when you got the certificate, you weren't when you finished your contract. Boom, you win.
Title: Re: UK/English Tax Q&A
Post by: dsob on June 15, 2011, 02:20:28 pm
I'm very unsure of the tax situation but I hope you have all been on the petition about the pension and signed it!

We are trying to lobby a change so we can get our pensions back (roughly 1 million a year). Get everyone you know to sign it and we might see this money again.

FB group: https://www.facebook.com/home.php?sk=group_189796034402386
Waygook topic: http://waygook.org/index.php/topic,1627.80.html
PETITION LINK: http://www.petitionbuzz.com/petitions/ukkoreapension
Title: Paying Korean taxes/UK taxes?
Post by: Darkeru on June 15, 2011, 07:55:48 pm
So I applied for a residency certificate and became tax-exempt in Korea, thinking I'd be staying two years. It seems like I'll only stay one year though.

Do you know if it's possible to change that and pay taxes in Korea retroactively, instead of the UK? If so, how? Does it work out better normally to do so? I have no receipts or anything, so I guess it'd be paying the flat rate.
Title: Re: UK/English Tax Q&A
Post by: Rutten on June 16, 2011, 08:32:33 am
i.e. If you are not a resident of the UK, that is you didn't present proof of residency when you came to korea and you meet the above criteria, you are only subject to Korean taxes as none of that income occurred in the UK.

Korean taxes are lower than the UK's taxes so it is therefore beneficial to become a non-resident of the UK for tax purposes by not presenting this troublesome 'proof of residency'.

Is that logic sound?

Even if you present the proof of residency you might not count as a resident in the UK when you return. The residency certificate will show that you were a resident when you applied for the certificate but after a tax year abroad, you might no longer count as a resident, thus avoiding taxation in either country. You were a resident when you got the certificate, you weren't when you finished your contract. Boom, you win.

I don't think you can avoid taxes in either country. You have to pay it somewhere. There's a double taxation agreement, I believe, where you don't have to pay taxes in BOTH countries, but you have to pay it either in the UK or Korea, I'm sure.

My contract says that the "proof of UK residency" was so we could be exempt from Korean taxes in our first two years here. Thus we'd have to pay something when we return to the UK due to 'having to pay it somewhere'? Is this correct?

I haven't provided a proof of UK residency certificate and I'm paying Korean taxes. Due to the double taxation agreement in place I should be exempt from paying anything regarding taxes on what I've earned in Korea when I return to the UK, right?

Maybe you don't pay taxes in either country, I'm not 100% on this.
Title: Re: Paying Korean taxes/UK taxes?
Post by: Rutten on June 16, 2011, 08:36:42 am
I had no receipts last year and my co-teacher just went to the bank with me and got a list of transactions or something that I had made on my card and that seemed to be sufficient. Although I couldn't claim anything on what I had paid in cash so I have one of those tax cards that I can present to cashiers when I pay in paper money or coinage and it gets recorded on there.

As for disregarding your residency cert halfway through or whatever, I've no idea on that :P
Title: Re: UK/English Tax Q&A
Post by: flasyb on June 16, 2011, 08:52:40 am
i.e. If you are not a resident of the UK, that is you didn't present proof of residency when you came to korea and you meet the above criteria, you are only subject to Korean taxes as none of that income occurred in the UK.

Korean taxes are lower than the UK's taxes so it is therefore beneficial to become a non-resident of the UK for tax purposes by not presenting this troublesome 'proof of residency'.

Is that logic sound?

Even if you present the proof of residency you might not count as a resident in the UK when you return. The residency certificate will show that you were a resident when you applied for the certificate but after a tax year abroad, you might no longer count as a resident, thus avoiding taxation in either country. You were a resident when you got the certificate, you weren't when you finished your contract. Boom, you win.

I don't think you can avoid taxes in either country. You have to pay it somewhere. There's a double taxation agreement, I believe, where you don't have to pay taxes in BOTH countries, but you have to pay it either in the UK or Korea, I'm sure.

My contract says that the "proof of UK residency" was so we could be exempt from Korean taxes in our first two years here. Thus we'd have to pay something when we return to the UK due to 'having to pay it somewhere'? Is this correct?

I haven't provided a proof of UK residency certificate and I'm paying Korean taxes. Due to the double taxation agreement in place I should be exempt from paying anything regarding taxes on what I've earned in Korea when I return to the UK, right?

Maybe you don't pay taxes in either country, I'm not 100% on this.

It's difficult to say with absolute certainty but the Q&A from the tax office that I posted above seems clear when it says if you are out of the country for the complete tax year (6th of April to the 5th of the following April), you do not pay UK taxes. It gets more confusing with the 183/91 days talk but the tax year thing is as solid as anything I can make out.

At the time of writing before, I thought that the residency certificate was just to say you were a resident in the UK at the time of application (for the certificate). However, I suspect it might mean that you were a resident in the UK for the duration of your contract and make you liable for taxes upon your return to the UK.

I'm going to pour over this today as I have no classes and am up to date wit the planning side of things.
http://www.hmrc.gov.uk/pdfs/ir20.pdf*

*I think this one might be out of date as it says, "This guidance does not apply from 6 April 2009. The guidance it contains is replaced by the guidance provided in HMRC6 – Residence, Domicile and the Remittance Basis. It is kept
available for those people who need to make reference to IR20 for their tax affairs before 
5 April 2009."

This is the newest one: http://www.hmrc.gov.uk/cnr/hmrc6.pdf
Title: Re: UK/English Tax Q&A
Post by: flasyb on June 16, 2011, 10:22:53 am
OK, so that took the best part of the morning. I glossed over the parts that I thought weren't relevant to me. My situation is that I left the UK in September 2010 will finish my year here in Korea, head to India for 10 weeks and get home in December 2011. That's important because it means that at no point was I outside of the UK for a full tax year. I thought there was a good chance that I would count as a resident in the UK because of this and would have to pay tax. That seems not to be the case. Incidentally, I pay tax in Korea.

I think I'm doubly safe from tax in the UK. Firstly because of the DTA (double taxation agreement) the UK has with Korea which can be read here: http://www.hmrc.gov.uk/international/korea-dtc.pdf

Secondly because of what's called "split residency". Here are the relevant paragraphs:

"10.7 Earned income from employment when you come to or leave
the UK part-way through a tax year
The following guidance relates only to income you earn as an employee. All
other types of earned income are taxed in the same way as unearned income –
see 10.11.
When you become resident in the UK
If you come to the UK during a tax year to take up permanent residence or to
stay for at least two years, you are resident in the UK for the whole of that tax
year. But there is a concession (subject to conditions) which allows you to be
taxed as a non-resident for the part of the tax year before you became resident
(extra-statutory concession A11). This means that the foreign income you
received before you arrived in the UK will not be liable to UK tax.
When you are resident in the UK any leave pay you receive is normally taxable.
If you have been working abroad and are paid for a period of leave spent in the
UK, it will be taxed here as ‘terminal leave pay’. It is taxed as arising in the
period to which it relates – even if your entitlement to the leave pay was built
up during a period of overseas employment. If you are able to claim the
Seafarer’s Earnings Deduction, you may be exempt from UK tax on your
leave pay but this will depend on your individual circumstances. Any leave pay
you receive for a period when you are resident and ordinarily resident is
normally taxable.
When you stop being resident in the UK
If you leave the UK during a tax year for full-time service under a contract of
employment, the concession which applies to those people arriving in and
becoming resident in the UK during a tax year (extra-statutory concession A11)
works in a similar way, subject to certain conditions. The concession allows
you to be taxed as a non-resident for the part of the tax year after you left the
UK. This means that the foreign income you receive in the tax year after you
leave the UK and become non-resident will not be liable to UK tax."

extra-statutory concession A11 is here http://www.hmrc.gov.uk/manuals/eimanual/eim42850.htm

I'm now 99% confident that I won't have to pay tax on my earnings in Korea when I get back to the UK. The split residency means that I am currently resident in Korea and pay taxes here. When I get back to the UK, I will cease to be resident in Korea and become resident in the UK.* I will only pay tax on the time I am resident in the UK. Kind of linked with the DTA.

Out of curiosity, I'm now going to read up on the significance of the residency certificate and what that means for the residency status of those people who gave residency certificates to their schools.

*It's called split residence because the tax year (6th of April to the following 5th of April) is divided into two parts with residency in two countries NOT residency in both countries at the same time which is something different (dual residency).
Title: Re: UK/English Tax Q&A
Post by: Darkeru on June 16, 2011, 10:53:14 am
Taxes completely confuse me, so I'm asking advice here.

My situation is I've only stayed in Korea for one year - not a whole tax year since I came on August 15th 2010 and am leaving on August 24th/25th 2011.

I submitted the form to state I was going to work abroad in the UK and submitted the residency certificate here to avoid taxation here.

What do I need to pay in taxes and who to? Is there any best method?

Title: Re: UK/English Tax Q&A
Post by: Rutten on June 16, 2011, 11:00:46 am
Thanks for that flasyb :) I'm pretty sure now, like you said 99.9% (I'm never 100% sure with taxes..), that we won't have to pay taxes upon entering the UK because of both of the reasons you said.

I, too, am confused about this residency certificate now.. I'm not sure what it means for our taxes back home. Maybe if you submitted the residency cert (proof of residence in the UK) then you don't have to pay taxes on income either end, provided you're within the 2 year limit in Korea? I was under the impression that you had to pay tax somewhere and the residency cert meant that you pay UK taxes, not Korean; and if you didn't claim UK residency then you paid Korean taxes, not UK taxes.

Thanks again for your research flasyb :) Seems like ur much more capable than myself on this tax rubbish...
Title: Re: UK/English Tax Q&A
Post by: flasyb on June 16, 2011, 12:51:55 pm
This issue with the residence certificate seems to have very little information on the internet. I can find no conclusive answers for whether or not you need to pay tax in the UK if you exempt yourself from tax using the residence certificate.

This looked promising but then I looked at E) iii) in the FAQs. Not very helpful but understandable given the complexity of tax laws and the number of different countries with different laws.  http://www.efl-law.com/tax.php

It might be the case that I need to do some skyping this evening to clarify the issue but given everything I have read so far, here's my opinion on it (just my opinion supported by what I have read, I can't absolutely confirm this, yet):

The real question is "Does the residence certificate mean that I am a resident of the UK while I work here in Korea?" (and if it does, will I have to pay tax?)
The answer? No. How could it?

The various definitions of a resident in the UK are provided in the hmrc6 that I posted earlier (http://www.hmrc.gov.uk/cnr/hmrc6.pdf). They are complicated but they don't say anything about a piece of paper allowing you to remain a resident in the UK and pay taxes there. Whether or not you are a resident of the UK is decided by your actual presence in the UK.* (sections 2 and 3)

Because of these various complicated definitions (of ordinary residence, residence, non-residence and domicile) I think that the UK residence certificate does not mean you have to pay taxes in the UK. In fact, I think that given the rules I posted earlier, if you have a UK residence certificate and give it to your employer in Korea, you will not have to pay any tax in Korea or in the UK for your first two years working in Korea. After that, you will only have to pay tax in Korea for the duration that you are working here. If you return to the UK and get a job in the UK in the middle of a tax year (November say) you will still only have to pay tax in the UK on the money that you earned in the UK.

You should never pay tax in both countries and I believe that if you hand in your residence certificate to your employer, you won't have to pay tax in either country for the first two years of your time in Korea.

* Other factors are also taken into account such as property, kids in school, how often you return ect. So it isn't just a matter of how many days you spend in the UK but says spent in the UK and the frequency/purpose of those days is important.
Title: Re: UK/English Tax Q&A
Post by: Rutten on June 16, 2011, 01:55:03 pm
This issue with the residence certificate seems to have very little information on the internet. I can find no conclusive answers for whether or not you need to pay tax in the UK if you exempt yourself from tax using the residence certificate.

This looked promising but then I looked at E) iii) in the FAQs. Not very helpful but understandable given the complexity of tax laws and the number of different countries with different laws.  http://www.efl-law.com/tax.php

It might be the case that I need to do some skyping this evening to clarify the issue but given everything I have read so far, here's my opinion on it (just my opinion supported by what I have read, I can't absolutely confirm this, yet):

The real question is "Does the residence certificate mean that I am a resident of the UK while I work here in Korea?" (and if it does, will I have to pay tax?)
The answer? No. How could it?

The various definitions of a resident in the UK are provided in the hmrc6 that I posted earlier (http://www.hmrc.gov.uk/cnr/hmrc6.pdf). They are complicated but they don't say anything about a piece of paper allowing you to remain a resident in the UK and pay taxes there. Whether or not you are a resident of the UK is decided by your actual presence in the UK.* (sections 2 and 3)

Because of these various complicated definitions (of ordinary residence, residence, non-residence and domicile) I think that the UK residence certificate does not mean you have to pay taxes in the UK. In fact, I think that given the rules I posted earlier, if you have a UK residence certificate and give it to your employer in Korea, you will not have to pay any tax in Korea or in the UK for your first two years working in Korea. After that, you will only have to pay tax in Korea for the duration that you are working here. If you return to the UK and get a job in the UK in the middle of a tax year (November say) you will still only have to pay tax in the UK on the money that you earned in the UK.

You should never pay tax in both countries and I believe that if you hand in your residence certificate to your employer, you won't have to pay tax in either country for the first two years of your time in Korea.

* Other factors are also taken into account such as property, kids in school, how often you return ect. So it isn't just a matter of how many days you spend in the UK but says spent in the UK and the frequency/purpose of those days is important.

Nice researching. I rekon your right. I'm paying Korean taxes now so I'm certain not to pay anything when I get home, but I'd be a few hundred thousand won better off a year (for two years) if I had submitted that residency cert. Who knows, maybe they'll find something they can charge me for and I'll be out even more cash, but I can't see that happening.

I'm not sure what the residency certificate actually tells koreans, mind you. Why do I have to show a certificate of residence in the UK when they know we're from that country? Just not sure what it means to them and why the flimsy excuse for a certificate makes us tax free?
Title: Re: UK/English Tax Q&A
Post by: blanco on June 16, 2011, 02:22:22 pm

The RC is only needed if you want to opt out of paying Korean tax and want to pay UK tax. However, the taxes in Korea are much lower than back home. If you want to pay the lower tax to Korea just tell your school and they will calculate how much you owe. I dont get taxed monthly from my pay because I have to settle the tax bill at the end of the tax year. I know this is the same for other teachers.

Also, this is worth a mention, I've heard that even if you did tell HMRC that you have been working abroad before departing the UK, if you return home before the end of the current tax year you could also be landed with a tax bill from the UK!! 
Title: Re: UK/English Tax Q&A
Post by: flasyb on June 16, 2011, 02:28:58 pm
This issue with the residence certificate seems to have very little information on the internet. I can find no conclusive answers for whether or not you need to pay tax in the UK if you exempt yourself from tax using the residence certificate.

This looked promising but then I looked at E) iii) in the FAQs. Not very helpful but understandable given the complexity of tax laws and the number of different countries with different laws.  http://www.efl-law.com/tax.php

It might be the case that I need to do some skyping this evening to clarify the issue but given everything I have read so far, here's my opinion on it (just my opinion supported by what I have read, I can't absolutely confirm this, yet):

The real question is "Does the residence certificate mean that I am a resident of the UK while I work here in Korea?" (and if it does, will I have to pay tax?)
The answer? No. How could it?

The various definitions of a resident in the UK are provided in the hmrc6 that I posted earlier (http://www.hmrc.gov.uk/cnr/hmrc6.pdf). They are complicated but they don't say anything about a piece of paper allowing you to remain a resident in the UK and pay taxes there. Whether or not you are a resident of the UK is decided by your actual presence in the UK.* (sections 2 and 3)

Because of these various complicated definitions (of ordinary residence, residence, non-residence and domicile) I think that the UK residence certificate does not mean you have to pay taxes in the UK. In fact, I think that given the rules I posted earlier, if you have a UK residence certificate and give it to your employer in Korea, you will not have to pay any tax in Korea or in the UK for your first two years working in Korea. After that, you will only have to pay tax in Korea for the duration that you are working here. If you return to the UK and get a job in the UK in the middle of a tax year (November say) you will still only have to pay tax in the UK on the money that you earned in the UK.

You should never pay tax in both countries and I believe that if you hand in your residence certificate to your employer, you won't have to pay tax in either country for the first two years of your time in Korea.

* Other factors are also taken into account such as property, kids in school, how often you return ect. So it isn't just a matter of how many days you spend in the UK but says spent in the UK and the frequency/purpose of those days is important.

Nice researching. I rekon your right. I'm paying Korean taxes now so I'm certain not to pay anything when I get home, but I'd be a few hundred thousand won better off a year (for two years) if I had submitted that residency cert. Who knows, maybe they'll find something they can charge me for and I'll be out even more cash, but I can't see that happening.

I'm not sure what the residency certificate actually tells koreans, mind you. Why do I have to show a certificate of residence in the UK when they know we're from that country? Just not sure what it means to them and why the flimsy excuse for a certificate makes us tax free?

Probably just something to make working in Korea sound more attractive and the piece of paper is to satisfy bureaucratic process.

To summarise, the best thing you can do is make sure that when you get back to the UK you are considered a non-resident from the moment you left for Korea. If you are considered a non-resident of the UK for the duration of your time away, you won't have to pay tax in the UK. Filling out a P85 (I think the form you filled out Darkeru) to notify the tax man that you are going to work abroad and won't be paying taxes will definitely help with this. Here's the P85: http://www.hmrc.gov.uk/cnr/p85.pdf . I don't think it's too late.

The second thing you can do is pay tax in Korea. Under the DTA (double taxation agreement) between the two countries, you shouldn't have to pay tax in both countries although alarmingly if you are considered a resident of the UK, there is a chance that the tax you pay in Korea will only count as relief toward the total tax amount. You won't be taxed twice on the same income (i.e pay full tax in Korea and then full tax in the UK - double whammy) but you will have to pay at the UK rate (the highest) minus what you already paid in Korea. See Article 24 of the UK-Korea DTA.

Article 24
Limitation of relief
(1) Where under any provision of this Convention any income is relieved from tax in a
Contracting State and, under the law in force in the other Contracting State a person, in
respect of that income, is subject to tax by reference to the amount thereof which is
remitted to or received in that other Contracting State and not by reference to the full
amount thereof, then the relief to be allowed under this Convention in the first-mentioned
Contracting State shall apply only to so much of the income as is taxed in the other
Contracting State. http://www.hmrc.gov.uk/international/korea-dtc.pdf
Title: Re: UK/English Tax Q&A
Post by: elemoo on June 16, 2011, 03:02:29 pm
Boys and girls.... let make this real simple - no need to stress about the whole tax situation, your choices are simple.

1) If you wish to get exemption for up to 2yrs of employment here, you have to get the residency cert from the UK tax office - i did not do this as i knew i would be here for longer... also, if you do get your tax exemption, they will find a way to tax the hell out of you when you return to the UK to start a new job! Do not make the mistake that it is some free 2yr tax haven.

2) The option i chose - pay korean tax... it's nothing compared to UK tax! Once you return back to the UK, there is no paper pushing or fuss - you can show them your korean tax slips... end of. In my opinion it's just not worth all of the time and paperwork to get the the exemption only for it to catch up with you when you return home.

Feel free to prove me wrong - but we all know how the UK gov't works... it would be naive to think you will not get taxed at all!
Title: Re: UK/English Tax Q&A
Post by: dsob on June 16, 2011, 03:22:37 pm
Boys and girls.... let make this real simple - no need to stress about the whole tax situation, your choices are simple.

1) If you wish to get exemption for up to 2yrs of employment here, you have to get the residency cert from the UK tax office - i did not do this as i knew i would be here for longer... also, if you do get your tax exemption, they will find a way to tax the hell out of you when you return to the UK to start a new job! Do not make the mistake that it is some free 2yr tax haven.

2) The option i chose - pay korean tax... it's nothing compared to UK tax! Once you return back to the UK, there is no paper pushing or fuss - you can show them your korean tax slips... end of. In my opinion it's just not worth all of the time and paperwork to get the the exemption only for it to catch up with you when you return home.

Feel free to prove me wrong - but we all know how the UK gov't works... it would be naive to think you will not get taxed at all!

See that's incorrect. The 2 year tax break is available to any teacher as a KOREAN law brought in as an incentive for foreigners to teach here. The resident certificate is just to prove you are a resident of one of the countries where you get a tax break. If you are out of the UK for a whole tax year, you will not be taxed.

That's what I believe.
Title: Re: UK/English Tax Q&A
Post by: Chocolate Starfish on June 16, 2011, 04:10:05 pm
Boys and girls.... let make this real simple - no need to stress about the whole tax situation, your choices are simple.

1) If you wish to get exemption for up to 2yrs of employment here, you have to get the residency cert from the UK tax office - i did not do this as i knew i would be here for longer... also, if you do get your tax exemption, they will find a way to tax the hell out of you when you return to the UK to start a new job! Do not make the mistake that it is some free 2yr tax haven.

2) The option i chose - pay korean tax... it's nothing compared to UK tax! Once you return back to the UK, there is no paper pushing or fuss - you can show them your korean tax slips... end of. In my opinion it's just not worth all of the time and paperwork to get the the exemption only for it to catch up with you when you return home.

Feel free to prove me wrong - but we all know how the UK gov't works... it would be naive to think you will not get taxed at all!

See that's incorrect. The 2 year tax break is available to any teacher as a KOREAN law brought in as an incentive for foreigners to teach here. The resident certificate is just to prove you are a resident of one of the countries where you get a tax break. If you are out of the UK for a whole tax year, you will not be taxed.

That's what I believe.

The other thing is that you *are* paying Korean tax.  You are paying tax at a special rate of 0% for the first two years (it's easier to think of it this way than 'I am paying no tax').

The best solution is to call the UK tax office.  You can do it cheaply with SkypeOut.  You could also ask someone in the UK to ask questions as if they were coming to Korea for a year.  The tax office is not out to screw you.  Everybody must pay tax.  You need to ask the right questions and sort out *your* situation.  You can't just pretend the law doesn't apply to you, or no-one will find out.  If you find out what to do, you can do it.

When I left my home country I found out what my tax situation would be, and I registered as non-resident for tax purposes (because I could).  I still pay tax on interest earned on my account there, but not on earnings here.  You really need to know about your own situation, so that you avoid nasty surprises later.
Title: Re: Paying Korean taxes/UK taxes?
Post by: sw712 on June 16, 2011, 11:11:21 pm
I had no receipts last year and my co-teacher just went to the bank with me and got a list of transactions or something that I had made on my card and that seemed to be sufficient. Although I couldn't claim anything on what I had paid in cash so I have one of those tax cards that I can present to cashiers when I pay in paper money or coinage and it gets recorded on there.

As for disregarding your residency cert halfway through or whatever, I've no idea on that :P

What is the card that you present to cashiers? My co-teacher said that I should start paying income tax here, but even after paying it monthly I should pay more in January, as Koreans have to. She mentioned keeping receipts to prove that I have spent money here and to show that I have put money into the economy, so that I may not be liable to pay more tax, but she couldn't give me any more information than that. How does the card work? and were you stung with a huge tax bill in January?
Title: Tax - How much? Pay in both countries?
Post by: Darkeru on June 20, 2011, 12:07:36 pm
Two questions?

1) How much is tax in Korea? I've seen answers saying anything from 3% to 15%.

2) If I pay tax in Korea, do I have to pay tax in the UK too? If not, what proof do I need?
Title: Re: Tax - How much? Pay in both countries?
Post by: Davey on June 20, 2011, 12:09:46 pm
Two questions?

1) How much is tax in Korea? I've seen answers saying anything from 3% to 15%.

2) If I pay tax in Korea, do I have to pay tax in the UK too? If not, what proof do I need?

Please use the search function.

I recently consolidated various tax threads.

Incidentally, the tax rate is 15%.

Moderator Daejeon wrote a detailed explanation on how our taxes are calculated earlier in this thread. Check it out!
Title: Re: UK/English Tax Q&A
Post by: tallullah on June 20, 2011, 12:25:27 pm
I got my residency certificate from the UK tax office by emailing the tax office to ask about what tax was necessary for me to pay.  Here is the email address that I used: non-residents@hmrc.gov.uk

A tax office employee confirmed that I remain taxable in the UK but because I am not working in the UK I will not have to pay tax for two years.

I work at a public school.  Hope that helps.
Title: Re: Paying Korean taxes/UK taxes?
Post by: Rutten on June 20, 2011, 12:52:55 pm
I had no receipts last year and my co-teacher just went to the bank with me and got a list of transactions or something that I had made on my card and that seemed to be sufficient. Although I couldn't claim anything on what I had paid in cash so I have one of those tax cards that I can present to cashiers when I pay in paper money or coinage and it gets recorded on there.

As for disregarding your residency cert halfway through or whatever, I've no idea on that :P

What is the card that you present to cashiers? My co-teacher said that I should start paying income tax here, but even after paying it monthly I should pay more in January, as Koreans have to. She mentioned keeping receipts to prove that I have spent money here and to show that I have put money into the economy, so that I may not be liable to pay more tax, but she couldn't give me any more information than that. How does the card work? and were you stung with a huge tax bill in January?

it's called a 'Tax Save Card' (www.taxsave.go.kr is the address on my card but it's asking me to install something :S). I had to pay no extra tax at the beginning of the year actually, which surprised me.
My co-teacher kept saying that they ask for all my tax details as a way to refund me money as opposed to taking anything (i tripled checked this was the case with her and the tax person on the phone at the time :P).
as it turned out, i got nothing back or gave anything extra, but i'm not holding out any hopes for next year...
Title: Re: UK/English Tax Q&A
Post by: Davey on June 20, 2011, 10:25:57 pm
I'm terribly confused.  When did this 15% come into effect?

Previously, I had been paying something like 2%.  It was supposed to be monthly (excluding my previous employer's actions).

When did it go to 15%?  I'm at a public school this year (but have been in Korea for over 2 years now, so no tax-exemption).  Will I be paying 15%?  My school isn't doing monthly deductions, despite me asking (I need my co-teacher to be more firm with the financial manager).  Will I get walloped at the end of this year?  My coteacher says that her and I have a similar salary and her tax is approximately 20,000/month and hasn't mentioned providing receipts or anything.

If they aren't deducting it monthly, then, yes, you will get hit all at once when it's tax time. Financially, this can be viewed as a good thing if you use this "extra" money to invest now and simply use the principal to pay the taxes later on.

The rate is 15%, but based on a progressive system, so your entire tax liability is simply not 15% of your total income. Check page two of this thread; Mod Daejeon made an excellent example.



Title: Re: UK/English Tax Q&A
Post by: Halcyon on June 20, 2011, 10:42:21 pm
Agreed.  A lot of these tax queries could be answered if people were to refer to Daejon's detailed explanation of how taxes are calculated here.

@justanotherwaygook-  Ask your coteacher what she pays in taxes at the end of the tax year.  I think then things will start to make a lot more sense.  A lot, if not the majority, of Korean's pay their taxes in a lump sum the end of the tax year.  Even if you decide to pay as you go, with the new tax regulations that kicked in at the beginning of tax year 2010, you'll almost assuredly some owe amount of taxes at the end of the tax year.  In your case, if you're no longer able to claim an exemption and no taxes are being deducted now, then you're going to have to pay up at the end of the year.
Title: Re: UK/English Tax Q&A
Post by: calioril on June 30, 2011, 09:57:38 am
I wish people would stop calling it tax exemption it is a tax referral.

If you do not pay tax here or back home you are called a tax evader. Thus you have to pay in one or the other. It's simples, ignore the konglish term, and pay your 5% tax here instead of 30% at home.
Title: Re: UK/English Tax Q&A
Post by: flasyb on June 30, 2011, 01:44:52 pm
I wish people would stop calling it tax exemption it is a tax referral.

If you do not pay tax here or back home you are called a tax evader. Thus you have to pay in one or the other. It's simples, ignore the konglish term, and pay your 5% tax here instead of 30% at home.

That's just not true. You need to read the documentation I posted earlier rather than guess or go with "what feels right".

If you are non-resident in the UK for the time you work abroad, you don't have to pay tax on your Korean earnings during the time of non-residence. If you are absent for an entire tax year from the UK, (6th of April to the 5th of April the following year) you will probably not have to pay tax on your earnings abroad.

There are a few exceptions such as if you own property, have kids that attend school in the UK and have other solid "ties" to the UK, you could count as resident in the UK and in Korea at the same time! In which case you have dual residency. With dual residency, you will have to pay tax in Korea and in the UK however under the DTA (dual tax agreement) what you pay in Korea will be received as tax credits toward your UK tax and so you will not pay tax on the same earnings twice but rather the highest (UK by far) of the two.

Another exception is remittance but I didn't read up on that because it doesn't apply to me.

Another exception is what's called "split residency" in which you are resident in one country (Korea) for part of the tax year and then resident in the UK for the other part of the tax year. In that case, you would be liable for tax in Korea for the duration of your time here and then liable for tax in the UK for the period of residency there but you would only pay tax to the country when you are resident in that country and earning money.

So you see, it's a lot more complicated that you're trying to make out. Tax is never simple. You should read the documents I posted earlier if you doubt me (straight from the Inland Revenue) and if you haven't read the appropriate documents, you're probably not in a position to comment.

To summarise, you can definitely get away with not paying tax for two years. The easiest way is simply not to be in the UK for two tax years (if you're going to be getting back home before April, take a holiday elsewhere).

Read up on it, do the self-evaluation form and send some questions to the tax office if you like. Don't just assume.
Title: Re: UK/English Tax Q&A
Post by: Klogical on July 04, 2011, 10:49:12 am
someone enlighten me please...

the only way HMRC will find out - to my mind - is if the cash transfers and/or accumulation of cash in your account from korea is so much so that they have to report it

other than that i cant see them finding out

I worked black for years while at uni and on postgrads - plus full time work as well .... never heard a whisper
Title: Re: UK/English Tax Q&A
Post by: flasyb on July 04, 2011, 12:23:42 pm
someone enlighten me please...

the only way HMRC will find out - to my mind - is if the cash transfers and/or accumulation of cash in your account from korea is so much so that they have to report it

other than that i cant see them finding out

I worked black for years while at uni and on postgrads - plus full time work as well .... never heard a whisper

Well, if you go back to the UK you will have to fill in a P86. When I went home after 19 months in Peru, I tried to claim jobseeksers and I had to fill in loads of forms to do with residency and they took photocopies of my Peruvian visa stamps from my passport. If they did the same for my Korean visa, they would see that I had a work visa for Korea and that I was in Korea for just over a year. Surely they would ask questions then. You just need to be declared non-resident for the time you were in Korea and you won't have to pay UK tax.
Title: Severance and renewal bonus minus deductions.
Post by: UKsimon on July 11, 2011, 12:53:49 pm
Today was the first I have heard of any deductions against severance and EPIK renewal bonuses, does anyone know what these deductions are? - will it be just tax?

Thanks.
Title: Re: Severance and renewal bonus minus deductions.
Post by: timmahh on July 11, 2011, 01:56:21 pm
im curious as well. i was thinking our severance pay will get taxed by korea...anyone know if our pension will?
Title: Re: Severance and renewal bonus minus deductions.
Post by: Davey on July 11, 2011, 02:44:32 pm
im curious as well. i was thinking our severance pay will get taxed by korea...anyone know if our pension will?

Yes, severance, renewal, and pension are all taxed. Basically anything in lieu of cash is taxable.

Moderator Daejeon wrote a long post regarding taxation in Korea earlier in this thread.
Title: Re: Severance and renewal bonus minus deductions.
Post by: injuredeagle on July 26, 2011, 01:22:24 pm
Today was the first I have heard of any deductions against severance and EPIK renewal bonuses, does anyone know what these deductions are? - will it be just tax?

Thanks.

Anyone know about this? I had no idea our severance was taxed. How much?
Title: Re: UK/English Tax Q&A
Post by: One Bomb on August 04, 2011, 10:02:23 am
OK, so I just read through the last few pages of this thread and just wanted some clarification.

I have my UK Certificate of Residency but, from what I gather, if I present this to my school I'll be exempt from paying taxes while in Korea but be taxed on my earnings when I return to the UK. On the other hand, if I don't give the school my certificate, I'll be taxed while I'm in Korea (at a considerably lower rate) and therefore any money I bring back to the UK can't be taxed again. Does this sound right?
Title: Re: UK/English Tax Q&A
Post by: flasyb on August 04, 2011, 06:12:39 pm
OK, so I just read through the last few pages of this thread and just wanted some clarification.

I have my UK Certificate of Residency but, from what I gather, if I present this to my school I'll be exempt from paying taxes while in Korea but be taxed on my earnings when I return to the UK. On the other hand, if I don't give the school my certificate, I'll be taxed while I'm in Korea (at a considerably lower rate) and therefore any money I bring back to the UK can't be taxed again. Does this sound right?

If you are absent from the UK for an entire tax year (April the 6th to April the 5th if I remember rightly), you will not have to pay UK tax unless you have ties to the UK like family (ie kids in school) or property and such like - things that tax contributes towards. In all probability you will be considered a non-resident of the UK if you have come to Korea to work and live full time even if you are not absent for the full tax year (ie you're gone from August to August and find you have split the tax year). In that case, you will be liable to pay UK tax but only on earnings from a UK job. Ignore the residency certificate. It's irrelevant to whether or not you pay taxes in the UK.

The question you need to ask yourself is, "Am I resident in the UK?" If the answer is no, I have no dependants in the UK, no property, I've just moved to Korea to work for 1+ years, then you will not have to pay UK taxes on your Korean earnings. Does that help?
Title: Re: UK/English Tax Q&A
Post by: Epistemology on September 28, 2011, 11:11:31 am
Ok, I have the definitive answer from the UK tax office. Basically....If you are staying in Korea for one year only, DO NOT get the residency certificate as you will be liable for tax on any worldwide income you earn. Elect instead to pay Korean taxes.
If you are staying in Korea for more than 1 year, Get the residency certificate as you will not be eligible to pay taxes on worldwide income, provided you are outside the country for over one tax year.

Quote
Thank you for contacting HMRC.

If you had only gone abroad for 12 months, and the period did not include a full tax year, you would have remained UK tax-resident and you would be chargeable to UK tax on your worldwide income. As you will be outside of the UK for a period including a full tax year, you will be regarded as non-resident for tax purposes and will not be liable to UK tax on your foreign earnings. I would recommend that you read the guidance in the booklet HMRC6. I am attaching a copy for you to refer to.

I think that finally settles that. At long last.
Title: Re: UK/English Tax Q&A
Post by: flasyb on September 28, 2011, 11:34:46 am
Ok, I have the definitive answer from the UK tax office. Basically....If you are staying in Korea for one year only, DO NOT get the residency certificate as you will be liable for tax on any worldwide income you earn. Elect instead to pay Korean taxes.
If you are staying in Korea for more than 1 year, Get the residency certificate as you will not be eligible to pay taxes on worldwide income, provided you are outside the country for over one tax year.

Quote
Thank you for contacting HMRC.

If you had only gone abroad for 12 months, and the period did not include a full tax year, you would have remained UK tax-resident and you would be chargeable to UK tax on your worldwide income. As you will be outside of the UK for a period including a full tax year, you will be regarded as non-resident for tax purposes and will not be liable to UK tax on your foreign earnings. I would recommend that you read the guidance in the booklet HMRC6. I am attaching a copy for you to refer to.

I think that finally settles that. At long last.

Nice work, mate! Very nice. Backs up everything I've been saying.

I'd like to make one small point though. The emphasis here is on the tax year. The tax year currently runs from the 6th of April to the 5th of April the following year. If you're out for that period of time, for the whole time, you will not have pay tax because you would be non-resident for the tax year. If anyone only comes to Korea for 1 year but is out of the country for the full duration between these dates, I'd say get the certificate too. Your passport stamps will prove this easily.

Another caveat is that if you have property in the UK and kids in school and suchlike back in the UK, there's a good chance you'll be considered a resident anyway - you gotta pay tax if you're using UK services.

However, I reckon that for the vast majority of UK citizens teaching in Korea, the stuff in the email that Epistemology received will apply to all of us.
Title: Re: UK/English Tax Q&A
Post by: Epistemology on November 16, 2011, 03:41:32 pm
Its now only good for one year if you change schools or POE. As long as you stay at the same school for 2 years, you are good to go.
Title: Re: UK/English Tax Q&A
Post by: tinnuche231285 on December 08, 2011, 09:23:23 pm
I've been here for 8 months now paying the lowest rate of Korean income tax which is peanuts compared to the British rate. Haven't heard from the Inland Revenue and fingers crossed I won't. I have just been contacted by the people at Student Loans though and if I don't declare to them how much I've been earning then they say they will charge me 150 quid.
Title: Re: UK/English Tax Q&A
Post by: gangwon on December 09, 2011, 08:22:28 am
Student loans can charge you a standard rate of about 150 pounds per month if you don't fill out an overseas assessment form. If you do, you'll have to pay around 35 pounds per month, depending on your wage over here. However, I didn't tell student loans I was abroad for 4 years and they didn't charge me anything. I'm only paying now to start clearing it now that we don't have the 0% interest rate.

Charlie
Title: Re: UK/English Tax Q&A
Post by: ross.d on December 28, 2011, 12:10:35 pm
I don't have a Residency Certificate was asked by my school, so I phoned the inland revenue and talked to an expert who advised me that because I didnt plan to come back to the UK between the tax year 2012-2013 then I was no longer a resident so didn't require a Certificate and to quote they "don't care about my earnings in Korea" so I am just going to pay Korean tax. Has anybody had an experience like this, I am still tempted to get the certificate and give to my school
Title: Re: UK/English Tax Q&A
Post by: v15ben on January 05, 2012, 09:39:10 am
Just been looking through this thread, very useful indeed.

Quick query though.

I am a UK citizen with EPIK (filed a P85 before I left in August 2010) and haven't paid UK tax since. I am considering renewing for a 3rd year and wondered if there are any documents I need to fill in either in Korea or from the UK regarding my taxes for my 3rd year. Is the progressive tax method something that is organised by my school or do I have to fill out forms and tell them (and HMRC?) that I am here for a 3rd year?
Title: Re: UK/English Tax Q&A
Post by: blanco on February 02, 2012, 03:22:26 pm
I have found these two links to be useful:


http://www.macfarlanes.com/media/572269/certificate%20of%20uk%20tax%20residence%20-%20ajc.pdf

http://www.hmrc.gov.uk/news/cert-of-residence.htm

Title: Re: UK/English Tax Q&A
Post by: eliza0506 on February 25, 2012, 07:44:03 pm
Hey guys,

Just wanted to give a definitive answer on this as it is a massive grey area! So I was in Korea for 1 yr Aug 10-Aug 11. I paid some minimal tax originally but submitted a proof of residency and then had any tax rebated. I've just completed a tax return for my time in Korea and had to pay UK tax. I'd recommend getting the proof of residency because even if you have paid tax in Korea, this amount is then deducted as foreign tax credits, which are an absolute nightmare to calculate so best to save yourself the hassle. The old law stating that if you are out of the country for 365 consecutively you are not liable to pay tax does no longer stand, HOWEVER I was told by HMRC that if you are out of the country for a full tax year i.e. April - April that you are not liable to pay tax. This does not seem fair as it means those entering Korea in March will more than likely be able to dodge this, while those entering in August like myself, will find themselves caught out. I went travelling after finishing in Korea for 4 months, however was told had I stayed out til April that I would not have had to pay! Doesn't seem right, I think they are still figuring things out.

However...I gotta say when speaking to people they've all responsed with 'What, you paid tax here? Sure you didn't live here!' Which I gotta say I agree with! So I'm sure there are loooads of people who just keep schtum about where they've been / what they've been doing. I had previously told student loans company what I was doing so I couldn't exactly backtrack but yeah...definitely something to think about.

Anyway hope this helps!!
Title: Re: UK/English Tax Q&A
Post by: minevj on February 27, 2012, 10:37:22 am
I did not get charged tax the whole of last year (2011) but now in Feb there is suddenly a tax payment on my pay slip. Don't know what that is about because I handed my home tax number and proof of residency at the beinning of last year.
Title: Re: residency certificate
Post by: terri on February 28, 2012, 01:37:38 pm
Is it possible for me to obtain a residency certificate from the uk despite already being in Korea? The first I had heard of it was when my co-teacher asked for it yesterday. I told her I didn't have one and she looked horrified.  :o
Title: Re: Re: residency certificate
Post by: leedseoul on February 28, 2012, 01:52:21 pm
Is it possible for me to obtain a residency certificate from the uk despite already being in Korea? The first I had heard of it was when my co-teacher asked for it yesterday. I told her I didn't have one and she looked horrified.  :o

Yes it's possible.  I contacted HMRC through this form: https://online.hmrc.gov.uk/shortforms/form/CNR_Claims_SEF?dept-name=CNR&sub-dept-name=&location=26&origin=http://www.hmrc.gov.uk

I explained the situation, and they sent me a signed electronic copy of the certificate which I simply had to print out.  My school/education board accepted it with no problems. 

However, I will be staying in Korea long-term.  If you have UK resident status and are only planning to be here for less than a couple of years, it's probably better to pay Korean tax. If you exempt yourself from Korean taxes, you will have to pay tax back in the UK for all earnings in Korea during the UK tax year you return in.
Title: Re: Re: residency certificate
Post by: gangwon on February 28, 2012, 01:58:53 pm
If you have UK resident status and are only planning to be here for less than a couple of years, it's probably better to pay Korean tax. If you exempt yourself from Korean taxes, you will have to pay tax back in the UK for all earnings in Korea during the UK tax year you return in.

Not true if you are out of the UK for an entire tax year. If you working here or out of the UK for a period of time that includes a complete April to April then you will not pay UK taxes and with the residency certificate you will also be exempt from SK taxes. So if you are March intake and work one year but travel for a month before returning to the UK it's still works in your favour.
Title: Re: Re: residency certificate
Post by: leedseoul on March 02, 2012, 12:28:59 pm
If you have UK resident status and are only planning to be here for less than a couple of years, it's probably better to pay Korean tax. If you exempt yourself from Korean taxes, you will have to pay tax back in the UK for all earnings in Korea during the UK tax year you return in.

Not true if you are out of the UK for an entire tax year. If you working here or out of the UK for a period of time that includes a complete April to April then you will not pay UK taxes and with the residency certificate you will also be exempt from SK taxes. So if you are March intake and work one year but travel for a month before returning to the UK it's still works in your favour.

That's correct, but unfortunately the majority of people (September starters and Hagwon teachers) who are here for a year won't be outside the UK for a perfect April-April tax year.
I worded the original msg confusingly, it should be that.... have to pay tax back for all earnings made in Korea that were within the UK tax year you return in.
Title: Re: Re: residency certificate
Post by: flasyb on March 02, 2012, 07:41:56 pm
If you have UK resident status and are only planning to be here for less than a couple of years, it's probably better to pay Korean tax. If you exempt yourself from Korean taxes, you will have to pay tax back in the UK for all earnings in Korea during the UK tax year you return in.

Not true if you are out of the UK for an entire tax year. If you working here or out of the UK for a period of time that includes a complete April to April then you will not pay UK taxes and with the residency certificate you will also be exempt from SK taxes. So if you are March intake and work one year but travel for a month before returning to the UK it's still works in your favour.

That's correct, but unfortunately the majority of people (September starters and Hagwon teachers) who are here for a year won't be outside the UK for a perfect April-April tax year.
I worded the original msg confusingly, it should be that.... have to pay tax back for all earnings made in Korea that were within the UK tax year you return in.

Not if you apply for "split residency" which is where you are resident in Korea for part of the tax year and resident in the UK for part of the tax year. If you do that the only tax you will pay in the UK is on money that you earned there.
Title: Re: UK/English Tax Q&A
Post by: RobOak on March 06, 2012, 07:30:29 am
 :)  I think you should have completed a p85 BEFORE YOU LEFT THE UK. To get the double taxation thing sorted.  If like me you own a property in the UK but are resident overseas you will still need to pay tax on the income from it, I believe.
Rob
Title: Re: UK/English Tax Q&A
Post by: stevieg4ever on March 06, 2012, 12:48:29 pm
useful information,thanks guys.
Title: Re: UK/English Tax Q&A
Post by: ndrwwlltts on May 08, 2012, 06:49:15 pm
As someone who applied for a certificate before the 15 day standard processing time I was informed of by HMRC, I advise anyone thinking of getting one before they leave the UK to try and complete the online form at least one month before, as they only just sent it to my home address in the UK now (more than a month after I applied for it, with them citing administrative pressures).
Title: Re: UK/English Tax Q&A
Post by: londonbhoy67 on June 15, 2012, 03:01:32 pm
When I left England I got the form from HRMC to become a non resident for tax purposes. Now been here for 2 years and just renewed for a 3rd year. I realise I will now have to pay taxes in Korea but do I have to do anything for the tax situation back home???
Title: Re: UK/English Tax Q&A
Post by: flasyb on June 15, 2012, 03:19:44 pm
When I left England I got the form from HRMC to become a non resident for tax purposes. Now been here for 2 years and just renewed for a 3rd year. I realise I will now have to pay taxes in Korea but do I have to do anything for the tax situation back home???

Do you own a house, have any dependants, or children back home attending school? In other words, do you have any "interests" in the UK, financial or otherwise?
Title: Re: UK/English Tax Q&A
Post by: livzy on June 30, 2012, 01:20:53 pm
What about if you've been in the UK during a tax year but only on holiday and didn't work, claim any benefits or get a bus pass etc? Does that count or are you still overseas for tax purposes? How about if you return in the summer for a holiday before;

a) returning to Korea
b) going off to another country
c) going 'traveling'

If in that summer you don't sign on or work are you still classified as overseas for tax purposes?
Title: Re: UK/English Tax Q&A
Post by: flasyb on June 30, 2012, 02:25:09 pm
What about if you've been in the UK during a tax year but only on holiday and didn't work, claim any benefits or get a bus pass etc? Does that count or are you still overseas for tax purposes? How about if you return in the summer for a holiday before;

a) returning to Korea
b) going off to another country
c) going 'traveling'

If in that summer you don't sign on or work are you still classified as overseas for tax purposes?

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

Quote
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.
Title: Re: UK/English Tax Q&A
Post by: robvandan on August 01, 2012, 05:53:18 pm
I initially wrote a letter to HMRC about 4 weeks before I left for Korea. Got a call from them and the letter arrived a few days before I left.

I asked about the whole situation regarding tax, and the letter means exemption from Korean Tax for the first two years.

Also the website states this;

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.

>> Seeing as the tax year starts in April, and I left in August, that means (non-resident), which means no UK TAX either.

I also had this confirmed by an accountant.

Even if your leaving in March, your earnings would only be taxed for around 1 month, and with our actual salary not being at all that high, may even drop into the lowest tax band.

But either way, don't worry you should be fine!!! Hope this is of help to you!
Title: Re: UK/English Tax Q&A
Post by: col89 on August 10, 2012, 07:00:43 pm
All this talk about UK taxes and I can't find a thing (on the entire internet) about Irish citizens and taxation!

Has anyone got some concrete information about Irish teachers?
Title: Re: UK/English Tax Q&A
Post by: WestMeetsEast on February 05, 2013, 10:56:22 am
I read this entire thread.

Twice.

I still don't understand though.

I've been in Korea since mid-August 2012 and haven't paid any tax out of my wages.  I figure the end of the tax year has come and gone in Korea and I'm still not paying anything.  I don't intend to go back to the UK until August-October 2014 after which I will have been out of the country for around 27 months.

What should I do?  I'm going back into education after this point.

I've literally done no paperwork for anything primarily because I don't have to deal with student loan paperwork until April of this year.

Advice?  Should I get the residency form and hand it in or not?  So confused. >_<  I had expected to be hit by Korean tax this month but my pay cheque was higher than ever with a lack of deductions for school meals etc.
Title: Re: UK/English Tax Q&A
Post by: Topcat on February 08, 2013, 12:28:45 pm
Hey! I've read the thread and there is some great advice here! Can anyone confirm if what i've written below is correct and i've understood the tax situation?

I came to Korea 15th November 2011 and i am now 3 months into my new second year contract. I never applied for a certificate of residency thinking that i would just pay here becuase its cheeper not realising the 'tax free two years bonus'. Doh!

Now my school say i owe 300,000 in taxes and need a certifcate of residency to avoid paying it. However i'm not sure if i will extend for another year which means i MIGHT leave this November 2013 which means i will of not have been away for a full tax year when i applied for the certificate and thus still a UK resident.

Shall i just bite the bullet and pay the taxes? Seems like for me its too little too late :cry:
Title: Re: UK/English Tax Q&A
Post by: lotte world on February 08, 2013, 12:44:58 pm
Does anyone actually read their contract these days?

Pay or don't pay.  I couldn't care less.
Title: Re: UK/English Tax Q&A
Post by: OneVurfedGwrx on February 08, 2013, 01:29:31 pm
Hey! I've read the thread and there is some great advice here! Can anyone confirm if what i've written below is correct and i've understood the tax situation?

I came to Korea 15th November 2011 and i am now 3 months into my new second year contract. I never applied for a certificate of residency thinking that i would just pay here becuase its cheeper not realising the 'tax free two years bonus'. Doh!

Now my school say i owe 300,000 in taxes and need a certifcate of residency to avoid paying it. However i'm not sure if i will extend for another year which means i MIGHT leave this November 2013 which means i will of not have been away for a full tax year when i applied for the certificate and thus still a UK resident.

Shall i just bite the bullet and pay the taxes? Seems like for me its too little too late :cry:

I'm still not 100% sure if claiming the "2 year bonus" will make you fully liable for UK taxes at UK rate.  The wording I've read implies that possibility so I've been happy to pay Korean taxes to avoid that risk. 

I think I've heard that US citizens have a loophole that means they don't pay taxes in either country for the two years, but couldn't link to the information as it was irrelevant to me.  But in most situations it makes sense that one country or the other will expect you to pay tax. 

Note to self, this year make more debit card purchases than cash ones to try and get a discount...
Title: Re: UK/English Tax Q&A
Post by: flasyb on February 08, 2013, 03:06:59 pm
@ Topcat

It doesn't matter what you do, you won't be paying taxes in the UK on foreign income unless you have a house/kids etc in the UK.

The certificate of residence is more of a bureaucratic thing to satisfy the Korean system.

The UK has a double taxation treaty with Korea. You won't pay two sets of taxes on the same income unless you have other interests as mentioned above (kids and suchlike require state money - schools, doctors etc - so by rights you should pay tax for them). If you don't have these other interests, then you won't be liable for tax on your Korean earnings.

If you return to the UK and get a job in the UK, you will have to pay taxes - BUT ONLY ON THE MONEY YOU EARN WHILST IN THE UK. The UK taxman won't be hitting you up for your Korean income. So if you start work in November, you will be straight onto PAYE (Pay As You Earn - the UK system of tax for most employees) from November onwards.

You can always call the UK tax office and find out yourself. Internet forum people aren't always the most reliable.  :evil:

Personally, I just paid the tax in Korea because I agree with taxation and because it was a relatively small amount. I live in Australia now and I pay tax here. I wouldn't expect the UK taxman to be chasing me for my Australian or Korean earnings any time soon.
Title: Re: UK/English Tax Q&A
Post by: lectrotek on February 14, 2013, 08:47:01 am
Just a word of warning - SELF ASSESSMENT

a couple of months ago, my folks at home forwarded me a bit of post that had been lying around unopened for a few weeks.

It was HMRC notifying me that I was being charged a daily penalty for late filing of a 2010-2011 tax return. This hit me like a sock full of wet sand, having never filled in a tax return before and having no idea how to complete the thing referring to 2 whole years ago.

Anyway, in my haste to placate them and stop the penalty, I managed to fill in the return incorrectly. The upshot was that I was lumped with a bill of about 1000quid. On the plus side, when I pointed out my circumstances (living abroad, it's impossible to submit a return online and the subsequent postal delays as a result - once it gets to HMRC there is a 5week backlog!) they wiped the late penalty.

Just to confuse things further, they then sent me out a copy of my 2012 return to fill in, also at that time 'late'. This has all entailed me frantically tearing my apartment apart for old payslips from my hagwon last year, hassling the HMRC over the phone and generally fretting massively.

and the saga isn't over. I think everything is in order, but I won't be surprised if there is another twist in the tail once HMRC get round to checking my re-submitted return   

I have that balance of 1000quid still hanging over my head even though I know that was due to my error, filling out the wrong part of the return. I just hope that I have now done enough to prove that I do not in fact owe this.


Anyway...lessons learnt:

1) Make sure all post is forwarded asap
2) READ the instructions that come with the return thoroughly
3) Keep all payslips
4) Get it sorted ASAP. 

Title: Re: UK/English Tax Q&A
Post by: JeremyC on February 14, 2013, 02:05:14 pm
If you return to the UK and get a job in the UK, you will have to pay taxes - BUT ONLY ON THE MONEY YOU EARN WHILST IN THE UK. The UK taxman won't be hitting you up for your Korean income. So if you start work in November, you will be straight onto PAYE (Pay As You Earn - the UK system of tax for most employees) from November onwards.

You can always call the UK tax office and find out yourself. Internet forum people aren't always the most reliable.  :evil:

Personally, I just paid the tax in Korea because I agree with taxation and because it was a relatively small amount. I live in Australia now and I pay tax here. I wouldn't expect the UK taxman to be chasing me for my Australian or Korean earnings any time soon.

Not sure that's 100% correct. I was told you are liable for tax on earnings you take/send in to the UK if you're resident there for tax purposes. Of course you'd have to take/send in a fair amount as the threshold has risen so much, but just a heads up.
Title: Re: UK/English Tax Q&A
Post by: flasyb on February 14, 2013, 03:25:43 pm
If you return to the UK and get a job in the UK, you will have to pay taxes - BUT ONLY ON THE MONEY YOU EARN WHILST IN THE UK. The UK taxman won't be hitting you up for your Korean income. So if you start work in November, you will be straight onto PAYE (Pay As You Earn - the UK system of tax for most employees) from November onwards.

You can always call the UK tax office and find out yourself. Internet forum people aren't always the most reliable.  :evil:

Personally, I just paid the tax in Korea because I agree with taxation and because it was a relatively small amount. I live in Australia now and I pay tax here. I wouldn't expect the UK taxman to be chasing me for my Australian or Korean earnings any time soon.

Not sure that's 100% correct. I was told you are liable for tax on earnings you take/send in to the UK if you're resident there for tax purposes. Of course you'd have to take/send in a fair amount as the threshold has risen so much, but just a heads up.

Yup.

Just like I posted above with the Q&A from the tax website.

Quote
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're not normally resident in the UK (and most of us won't be if we leave to take a job abroad for longer than one tax year) then you won't be paying UK tax on your Korean earnings.

All of this information is somewhere in this thread.
Title: Re: UK/English Tax Q&A
Post by: JeremyC on February 14, 2013, 05:39:37 pm
Ah, thanks flasyb.
Title: Re: UK/English Tax Q&A
Post by: WestMeetsEast on February 27, 2013, 02:12:52 pm
So.  I've been here over 6 months and haven't been taxed.

I'm going to fill in a p85 now because I intend to be out of the country for more than April to April and then I will apply for a certificate of residency.

Is this the right course of action even though I've been here 6 months already?
Title: Re: UK/English Tax Q&A
Post by: Morticae on February 27, 2013, 02:15:04 pm
So.  I've been here over 6 months and haven't been taxed.

I'm going to fill in a p85 now because I intend to be out of the country for more than April to April and then I will apply for a certificate of residency.

Is this the right course of action even though I've been here 6 months already?

If you haven't been taxed yet, they could be waiting to hit you with it at any point, in one lump sum. Probably your next paycheck.
Title: Re: UK/English Tax Q&A
Post by: Darkeru on September 02, 2013, 12:31:24 pm
A question about tax when non-resident in the UK.

If I pay my tax now, will it be refunded? I've not yet submitted my form to be declared as non-resident, because I didn't expect that I'd be out of the U.K. for a full tax year.
Title: Re: UK/English Tax Q&A
Post by: sootyandco on September 02, 2013, 12:52:24 pm
Tax on UK earnings may be qualify for a refund depending on how much of your personal allowances you have used up.  When you send in the form to say you're gong abroad, they will calculate it automatically and refund any over payments.

You won't get it all back unless your earnings for the tax year were below the tax threshold.

Also, what do you mean pay your tax now? When else would you pay it?
Title: Re: UK/English Tax Q&A
Post by: Darkeru on September 04, 2013, 07:19:21 am
Quote from: sootyandco link=topic=3810.msg390060#msg390060 date=137
Also, what do you mean pay your tax [b
now[/b]? When else would you pay it?

After returning?

I heard that if non-resident, you're not liable for UK taxes at all - only Korean ones, but to be non-resident you're out of the country the whole tax year, which they don't know until you actually are (as plans change and so on).
Title: Re: UK/English Tax Q&A
Post by: adfletch83 on September 04, 2013, 07:42:27 am
I feel like the answer to these questions depend on which advisor you speak to at HMRC. I called them twice before I left the UK and each time they had to 'speak to a supervisor and call me back'.
I actually had a good experience with them as they sent me the residency cert. after first time of asking.  I hear some people had problems with this.

As I understood it, as I have no dependents or property/investments in the UK, I am not liable for UK tax. I came here in Aug 2012 and paid tax April-Aug 2012 in the UK through PAYE.

Useful information on this thread, but the fact that it's SOOOO long shows just how annoyingly inconsistent and frustrating the UK tax system is. Things I've learned from being from the UK... If they can get your money, they will! :(
Title: Re: UK/English Tax Q&A
Post by: sootyandco on September 04, 2013, 09:18:34 am

I heard that if non-resident, you're not liable for UK taxes at all - only Korean ones
[/quote]

That's not entirely true.  As a non UK resident, you are exempted from UK Income Tax on your pay in South Korea.  The dual tax treaty means between UK and South Korea means that you will only pay Income Tax in  one country.   If you had any other income sources in the UK, that would be taxed in the UK.  Liklihood of that is low, but it's important to be clear, especially when it comes to dealing with the HMRC. The more knowledge you have, the more likely that you'll ask the right questions when you contact HMRC.

[/quote]
After returning?
[/quote]

Since you would have paid income tax in South Korea, you won't have to pay it in the UK.  This even applies if you had the 2 years tax exemption. 

However, what you need to look out for is Capital Gains Tax.  If you bring in huge sums of money from abroad in a tax year, that may become taxable. Bring in over 11,000GBP makes you eligble to pay CGT.


If you need to contact HMRC, it's best to do so in writing, they have a special team that deals only with expats, and I've found them to be consistent with their information.  The guys on the phone unfortunately know nothing.  They deal with calls mainly about tax credits and benefits, so are at a complete loss when it comes to the minority expat community.
Title: Re: UK/English Tax Q&A
Post by: Darkeru on September 04, 2013, 02:39:58 pm
However, what you need to look out for is Capital Gains Tax.  If you bring in huge sums of money from abroad in a tax year, that may become taxable. Bring in over 11,000GBP makes you eligble to pay CGT.


If you need to contact HMRC, it's best to do so in writing, they have a special team that deals only with expats, and I've found them to be consistent with their information.  The guys on the phone unfortunately know nothing.  They deal with calls mainly about tax credits and benefits, so are at a complete loss when it comes to the minority expat community.

That's unfortunate about the CGT. If I understand correctly, anyone who spends a full tax year working here would need to pay it, as even a 2.0 million won salary each month would surpass it.

Do you happen to know the department who deals with expats?  I actually wrote them before and they sent back a letter which basically restated the information I said I knew, then ignored the question I asked, which was how they applied in a certain situation.
Title: Re: UK/English Tax Q&A
Post by: sootyandco on September 08, 2013, 07:55:59 pm
I should stress the 'may' for CGT.  It may also be excempt under the Double taxation agreement, but I have been able to make sense of the agreement, and have not yet asked HMRC about it directly.

Anyway, the address I use is

Customer Operations
International Caseworker
BP1301, Benton Park View
Newcastle Upon Tyne
NE98 1ZZ
Title: Re: UK/English Tax Q&A
Post by: YoungMin on September 09, 2013, 07:54:56 am
However, what you need to look out for is Capital Gains Tax.  If you bring in huge sums of money from abroad in a tax year, that may become taxable. Bring in over 11,000GBP makes you eligble to pay CGT.


If you need to contact HMRC, it's best to do so in writing, they have a special team that deals only with expats, and I've found them to be consistent with their information.  The guys on the phone unfortunately know nothing.  They deal with calls mainly about tax credits and benefits, so are at a complete loss when it comes to the minority expat community.

That's unfortunate about the CGT. If I understand correctly, anyone who spends a full tax year working here would need to pay it, as even a 2.0 million won salary each month would surpass it.

Do you happen to know the department who deals with expats?  I actually wrote them before and they sent back a letter which basically restated the information I said I knew, then ignored the question I asked, which was how they applied in a certain situation.

This will help you understand what capitals gain tax is. You're barking up the wrong tree.

http://www.hmrc.gov.uk/cgt/possessions/basics.htm
Title: Re: UK/English Tax Q&A
Post by: joeyg on October 30, 2013, 12:39:36 pm
First. I'll make this crystal clear. You HAVE to pay tax. In one country or the other. Otherwise... well... that's exactly what tax evasion is.
Although, I don't think the UK tax office can be aware of whatever income you've earned abroad, unless you tell them. And while, usually, if you're outside of the UK for a full tax year April - April... they don't care about your income. IF however you get a Certificate of residency, you are technically stating that while not physically present in the UK, for tax purposes, that's where you are. So, while the money going into your bank account is here in Korea... in the eyes of the HMRC, you're living in the UK receiving money from abroad.

Ultimately, after working it all out... It seems a bit pointless to get the residency certificate and avoid Korean taxes, as you are then liable to pay the higher rate UK tax, plus all the hassle that comes with paying taxes to your homeland from abroad. But read on for all the info if you like. I've sourced where I could.



So...I recently talked to the tax office, and read through this thread and the UK taxation agreement, and a lot of the bloody HRMC webpage etc.
I now have a better understanding of this whole mess.

I'll start with the most important parts in the form of quotes


http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf (http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf)
"Article 20 (taken from the double taxation agreement)

Teachers

(1) Subject to paragraph (2) of this Article, an individual who visits one of the Contracting States for a period not exceeding two years for the purpose of teaching or engaging in research at a university, college, school or other similar educational institution which is recognised as non-profit seeking by the Government of that Contracting State, and who immediately before that visit was a resident of the other Contracting State, shall be taxable only in that other State on any remuneration for such teaching or research for a period not exceeding two years from the date he first visits that State for such purpose.

(2) Where, under the provisions of this
Convention taken together with the law in
force in the other State, a teacher or researcher referred to in paragraph (1) of this Article is exempt from tax in that other State on his remuneration, or is entitled to a deduction equal to that remuneration in computing his liability to tax in that other State, such remuneration shall be taxable only in the first-mentioned State."


The wording they give to Koreans is much simpler, and is the same as above but reversed:


http://www.hmrc.gov.uk/manuals/dtmanual/DT11360.htm (http://www.hmrc.gov.uk/manuals/dtmanual/DT11360.htm)
"DT11357 - Korea: Teachers and research workers (doube taxation agreement)

Under Article 20 of the agreement, a teacher or researcher from Korea will be exempt from United Kingdom tax on his remuneration for teaching or research for a period not exceeding two years from the date of his first arrival in the UK to teach or undertake research. But the exemption is available only if: (a) his visit to the UK does not exceed two years and (b) he remains taxable in Korea on the remuneration he earns in the United Kingdom."


The double taxation agreement is not an incentive put in place so people will come and work in Korea... It's not a bonus I know they have something like this out in the middle east, but it's just not the case here.

So, why do some many people think it's a tax free incentive??? Well, if you get the residency certificate and then don't tell them (UK tax office) about your earnings (here in Korea)... you will on paper owe them (UK tax office) nothing. But only in the same way that if you are self employed and fudge the numbers, you'd owe them less too. Obviously they have less control of affairs outside of their jurisdiction, so for the time being you might (highly likely) get away with it. But it could bite you in the ass later. In the states, they call it being Audited... I've never had the pleasure in the UK. But I imagine it involves having a nice chat with a tax agent and then they work out what you'd owe plus a fine, and one massive headache.
Like I said, you probably won't get caught... It's up to you.

What is the residency certificate?
Originally, I thought it this just proved that you had lived in a country. I thought my school needed this, much like a birth certificate to prove where I was living before. But, they wanted a certificate for the length of my contract that I hadn't yet worked.
This piece of paper basically says to the Korea government that you are technically resident in the UK for purposes of tax.

I repeat! A residency certificate basically says, for the purpose of taxes, you reside in the UK.
If you've already paid some Korean tax, you can get a copy of this information and they will take that in account in the UK as tax credits and reduce what you owe to them.

If you've already been in Korea for more than 2 years, or plan to stay here for more than two years, then the double taxation agreement is of no use to you. I think you could technically use it for the first 2 years if you wanted... But... from what I can tell, the agreement is only really beneficial to the Koreans, since UK tax is much higher.

If you're staying less than 2 years, you can use the double taxation agreement. But, well... Why would you. It's cheaper to pay the Koreans, and after all, it's their public services that you're using.

If you're outside of the UK for the whole tax year, April - April... you also, count as a non-resident for the purposes of tax. Unless you have the residency certificate. So, stay out of the country for that amount of time and don't pay the UK taxes. HMRC doesn't care. It's nothing to do with them. Remember though if you return to the UK before the end of the TAX year (they don't care if you were out of the country for 365 days, or Jan 1st - Jan 1st...l they care about April 5th - April 5th), then you have to pay taxes back on what you've earned so far for that tax year. If you started in March, it's best just to take an extended holiday at the end of your contract and return in April.

Quotage:
http://www.hmrc.gov.uk/international/return-uk.htm (http://www.hmrc.gov.uk/international/return-uk.htm)
"Returning to the UK less than a full tax year since your departure

If you were out of the country for less than a full tax year (6 April to 5 April) you will have remained UK resident while you were abroad. This means you will have to pay tax on your UK income and gains, and you may also have to pay UK tax on your foreign income and gains for the whole tax year. Follow the link below to find out how residence affects your tax."

Bloody cheeky of them, but there you go!


Also, please note, that if you want your UK pension, you should still top up your contributions. People usually mix this up with taxes, but it's a separate kettle of fish. As is the annoyance that UK peeps have to pay contributions to the Korean pension plan, but don't get anything back, while other countries get a nice lump refund at the end of their contract. I'll work that one out later.
Here's a link to work out paying contributions to your state pension from abroad http://www.hmrc.gov.uk/international/ni-abroad.htm (http://www.hmrc.gov.uk/international/ni-abroad.htm)

Hope this clears things up. Here are some links so you can read for yourself.

Also, if anyone has time. Give the HMRC a call and clear up the extent in which they record residency certificate requests at present. If they don't track that. Then yeah. You really could just hand one in and illegally avoid paying taxes in both countries without worry.

Sources: Korea - UK Double taxation convention
Specifically Article 20
http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf (http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf)

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/NEWS/cert-of-residence.htm (http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/NEWS/cert-of-residence.htm)

http://www.hmrc.gov.uk/manuals/dtmanual/DT11357.htm (http://www.hmrc.gov.uk/manuals/dtmanual/DT11357.htm)
Title: Re: UK/English Tax Q&A
Post by: Suz-goose on October 30, 2013, 01:56:34 pm
I watched this and found it pretty mind melding.

http://www.youtube.com/watch?v=yQW2K25Lyyk

I wish I hadn't given the residency cert, since I have been living here and not getting any of the UK services I will be expensively paying for, and had to buy myself here. I will be screwed over on a contributions based pension at home too, super  :rolleyes:.
Title: Re: UK/English Tax Q&A
Post by: WestMeetsEast on December 02, 2013, 08:12:32 am
I never got the residency cert. never declared myself an overseas citizen to the Korean government.  I've been here almost 16 months and haven't been called up for tax.  I'm leaving the country in 7 and a half months and am expecting to be hit with some huge tax bill.  Bring it on Korea.
Title: Re: UK/English Tax Q&A
Post by: YoungMin on December 02, 2013, 08:38:03 am
I never got the residency cert. never declared myself an overseas citizen to the Korean government.  I've been here almost 16 months and haven't been called up for tax.  I'm leaving the country in 7 and a half months and am expecting to be hit with some huge tax bill.  Bring it on Korea.

Sounds exciting. 2 years worth of tax (pension) sounds delightful.
Title: Re: UK/English Tax Q&A
Post by: TheSaint1981 on December 02, 2013, 10:59:27 am
So if theoretically your contract ends end of February beginning of March could you not just return to the U.K and stay off the radar (don't sign on or work) until after April 6th?

My school mithered me to submit a certificate of residency I finally managed to get one after months of toing and throwing with HMRC but I'm beginning to think it wasn't worth it after reading this thread.
Title: Re: UK/English Tax Q&A
Post by: robvandan on December 02, 2013, 01:05:24 pm
I think in truth it makes little difference financially as to which way you go. Of course tax in the UK is much higher, basic rate being 20p in the pound. However the tax free allowance is around 7,000 pounds ish, so the actual amount of income you will be taxed on is a lot less than many think. Last time I did the calculation between the two, it wasn't much difference (less than 100) iirc. Plus some people want to maintain their Tax Contributions and NI contributions for State Pension purposes.

Anyways, whatever boat people are in, I wouldn't worry too much, and I doubt HMRC are gonna be chasing too many of us over a few hundred quid, although I wouldn't hold my breath either.
Title: Re: UK/English Tax Q&A
Post by: englishenglisheeteecha on January 17, 2014, 06:32:59 am
Hi,

I don't know if any of you can help. I have been back in the UK for about 7 months now and HMRC are saying that because I wasn't out of the country for a full tax year (I was only in Korea for 7 months), I was classed as a UK citizen and therefore need to pay tax on what I earned in Korea. They say that I can just make up the percentage to 20%. So if was being taxed 7%, I would now need to pay the 13% to make up for it. Does anyone know what we are actually taxed in Korea and also if I should be including the pension percentage we paid etc?
Title: Re: UK/English Tax Q&A
Post by: WestMeetsEast on January 17, 2014, 07:39:42 am
I don't know what the exact tax rate is but I know that being out of the country less than a single april-april does indeed mean your earnings are taxable. T_T

One of the reasons I've stayed for 2 years.
Title: Re: UK/English Tax Q&A
Post by: akempster88 on March 14, 2014, 03:20:15 pm
QUESTION. Please help me :)

My situation.

Korea year 1 (2012-2013): I didn't receive the residency certificate in time, so I paid tax in Korea.
Korea year 2 (2013-2014): I paid 0% tax in Korea due to the residency certificate (which eventually arrived).

Now, year 3 (2014-2015)
Does the certificate provide me with any two years paying 0% tax in Korea
OR
Does the certificate only work for the first two years in Korea?

Any help would be amazing. I've emailed the HMRC, but last time they took around 2 months to reply (which is why I had to pay tax in year one!)

Thanks!!!
Title: Re: UK/English Tax Q&A
Post by: YoungMin on April 09, 2014, 11:11:24 am
First 2 years. Just pay Korean tax.
Title: Re: UK/English Tax Q&A
Post by: Choirs on September 05, 2014, 12:02:17 pm
joeyg's post above is absolutely fantastic and cleared up any misinformation I had about the 2 years 'tax free' exemption.

I highly suggest you give it a full read if you are in that situation.
Title: Re: UK/English Tax Q&A
Post by: RDW27 on December 04, 2014, 09:23:12 am
Hello,

Been trying to get my tax affairs in order - stress. My advice would be don't get a certificate, creates more hassle than it's worth in the long run. Pay the Korean Tax.

HMRC now seem to have fairly clear guidance on residency status - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/366839/rdr3_1_.pdf

If you are only staying in Korea one year, the significant point is the second oversees test. This is that you spent one of the last three tax years in the UK, then moved abroad, then you were in the UK for less than 15 days. This makes you a non-resident and therefore, as I understand it, not subject to Uk income tax.

Therefore if your contract finishes in February or March, it could well be worthwhile doing some travelling and lasting it out until after April 6th!
Title: Re: UK/English Tax Q&A
Post by: Robyn2014 on January 14, 2015, 09:43:53 pm
First. I'll make this crystal clear. You HAVE to pay tax. In one country or the other. Otherwise... well... that's exactly what tax evasion is.
Although, I don't think the UK tax office can be aware of whatever income you've earned abroad, unless you tell them. And while, usually, if you're outside of the UK for a full tax year April - April... they don't care about your income. IF however you get a Certificate of residency, you are technically stating that while not physically present in the UK, for tax purposes, that's where you are. So, while the money going into your bank account is here in Korea... in the eyes of the HMRC, you're living in the UK receiving money from abroad.

Ultimately, after working it all out... It seems a bit pointless to get the residency certificate and avoid Korean taxes, as you are then liable to pay the higher rate UK tax, plus all the hassle that comes with paying taxes to your homeland from abroad. But read on for all the info if you like. I've sourced where I could.



So...I recently talked to the tax office, and read through this thread and the UK taxation agreement, and a lot of the bloody HRMC webpage etc.
I now have a better understanding of this whole mess.

I'll start with the most important parts in the form of quotes


http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf (http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf)
"Article 20 (taken from the double taxation agreement)

Teachers

(1) Subject to paragraph (2) of this Article, an individual who visits one of the Contracting States for a period not exceeding two years for the purpose of teaching or engaging in research at a university, college, school or other similar educational institution which is recognised as non-profit seeking by the Government of that Contracting State, and who immediately before that visit was a resident of the other Contracting State, shall be taxable only in that other State on any remuneration for such teaching or research for a period not exceeding two years from the date he first visits that State for such purpose.

(2) Where, under the provisions of this
Convention taken together with the law in
force in the other State, a teacher or researcher referred to in paragraph (1) of this Article is exempt from tax in that other State on his remuneration, or is entitled to a deduction equal to that remuneration in computing his liability to tax in that other State, such remuneration shall be taxable only in the first-mentioned State."


The wording they give to Koreans is much simpler, and is the same as above but reversed:


http://www.hmrc.gov.uk/manuals/dtmanual/DT11360.htm (http://www.hmrc.gov.uk/manuals/dtmanual/DT11360.htm)
"DT11357 - Korea: Teachers and research workers (doube taxation agreement)

Under Article 20 of the agreement, a teacher or researcher from Korea will be exempt from United Kingdom tax on his remuneration for teaching or research for a period not exceeding two years from the date of his first arrival in the UK to teach or undertake research. But the exemption is available only if: (a) his visit to the UK does not exceed two years and (b) he remains taxable in Korea on the remuneration he earns in the United Kingdom."


The double taxation agreement is not an incentive put in place so people will come and work in Korea... It's not a bonus I know they have something like this out in the middle east, but it's just not the case here.

So, why do some many people think it's a tax free incentive??? Well, if you get the residency certificate and then don't tell them (UK tax office) about your earnings (here in Korea)... you will on paper owe them (UK tax office) nothing. But only in the same way that if you are self employed and fudge the numbers, you'd owe them less too. Obviously they have less control of affairs outside of their jurisdiction, so for the time being you might (highly likely) get away with it. But it could bite you in the ass later. In the states, they call it being Audited... I've never had the pleasure in the UK. But I imagine it involves having a nice chat with a tax agent and then they work out what you'd owe plus a fine, and one massive headache.
Like I said, you probably won't get caught... It's up to you.

What is the residency certificate?
Originally, I thought it this just proved that you had lived in a country. I thought my school needed this, much like a birth certificate to prove where I was living before. But, they wanted a certificate for the length of my contract that I hadn't yet worked.
This piece of paper basically says to the Korea government that you are technically resident in the UK for purposes of tax.

I repeat! A residency certificate basically says, for the purpose of taxes, you reside in the UK.
If you've already paid some Korean tax, you can get a copy of this information and they will take that in account in the UK as tax credits and reduce what you owe to them.

If you've already been in Korea for more than 2 years, or plan to stay here for more than two years, then the double taxation agreement is of no use to you. I think you could technically use it for the first 2 years if you wanted... But... from what I can tell, the agreement is only really beneficial to the Koreans, since UK tax is much higher.

If you're staying less than 2 years, you can use the double taxation agreement. But, well... Why would you. It's cheaper to pay the Koreans, and after all, it's their public services that you're using.

If you're outside of the UK for the whole tax year, April - April... you also, count as a non-resident for the purposes of tax. Unless you have the residency certificate. So, stay out of the country for that amount of time and don't pay the UK taxes. HMRC doesn't care. It's nothing to do with them. Remember though if you return to the UK before the end of the TAX year (they don't care if you were out of the country for 365 days, or Jan 1st - Jan 1st...l they care about April 5th - April 5th), then you have to pay taxes back on what you've earned so far for that tax year. If you started in March, it's best just to take an extended holiday at the end of your contract and return in April.

Quotage:
http://www.hmrc.gov.uk/international/return-uk.htm (http://www.hmrc.gov.uk/international/return-uk.htm)
"Returning to the UK less than a full tax year since your departure

If you were out of the country for less than a full tax year (6 April to 5 April) you will have remained UK resident while you were abroad. This means you will have to pay tax on your UK income and gains, and you may also have to pay UK tax on your foreign income and gains for the whole tax year. Follow the link below to find out how residence affects your tax."

Bloody cheeky of them, but there you go!


Also, please note, that if you want your UK pension, you should still top up your contributions. People usually mix this up with taxes, but it's a separate kettle of fish. As is the annoyance that UK peeps have to pay contributions to the Korean pension plan, but don't get anything back, while other countries get a nice lump refund at the end of their contract. I'll work that one out later.
Here's a link to work out paying contributions to your state pension from abroad http://www.hmrc.gov.uk/international/ni-abroad.htm (http://www.hmrc.gov.uk/international/ni-abroad.htm)

Hope this clears things up. Here are some links so you can read for yourself.

Also, if anyone has time. Give the HMRC a call and clear up the extent in which they record residency certificate requests at present. If they don't track that. Then yeah. You really could just hand one in and illegally avoid paying taxes in both countries without worry.

Sources: Korea - UK Double taxation convention
Specifically Article 20
http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf (http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf)

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/NEWS/cert-of-residence.htm (http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/NEWS/cert-of-residence.htm)

http://www.hmrc.gov.uk/manuals/dtmanual/DT11357.htm (http://www.hmrc.gov.uk/manuals/dtmanual/DT11357.htm)
Thanks for this very informative post! I've been in Korea since feb 2014 so when i go back in february 2015 i will still be within the tax year..are the tax office likely to know if ive been earning? And if so is it likely to be more than a few hundred pounds considering I've been paying tax here? Dunno if it would be cheaper to travel in europe for a month...
Title: Re: UK/English Tax Q&A
Post by: Morfee on January 15, 2015, 08:51:53 am
First. I'll make this crystal clear. You HAVE to pay tax. In one country or the other. Otherwise... well... that's exactly what tax evasion is.
Although, I don't think the UK tax office can be aware of whatever income you've earned abroad, unless you tell them. And while, usually, if you're outside of the UK for a full tax year April - April... they don't care about your income. IF however you get a Certificate of residency, you are technically stating that while not physically present in the UK, for tax purposes, that's where you are. So, while the money going into your bank account is here in Korea... in the eyes of the HMRC, you're living in the UK receiving money from abroad.

Ultimately, after working it all out... It seems a bit pointless to get the residency certificate and avoid Korean taxes, as you are then liable to pay the higher rate UK tax, plus all the hassle that comes with paying taxes to your homeland from abroad. But read on for all the info if you like. I've sourced where I could.



So...I recently talked to the tax office, and read through this thread and the UK taxation agreement, and a lot of the bloody HRMC webpage etc.
I now have a better understanding of this whole mess.

I'll start with the most important parts in the form of quotes


http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf (http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf)
"Article 20 (taken from the double taxation agreement)

Teachers

(1) Subject to paragraph (2) of this Article, an individual who visits one of the Contracting States for a period not exceeding two years for the purpose of teaching or engaging in research at a university, college, school or other similar educational institution which is recognised as non-profit seeking by the Government of that Contracting State, and who immediately before that visit was a resident of the other Contracting State, shall be taxable only in that other State on any remuneration for such teaching or research for a period not exceeding two years from the date he first visits that State for such purpose.

(2) Where, under the provisions of this
Convention taken together with the law in
force in the other State, a teacher or researcher referred to in paragraph (1) of this Article is exempt from tax in that other State on his remuneration, or is entitled to a deduction equal to that remuneration in computing his liability to tax in that other State, such remuneration shall be taxable only in the first-mentioned State."


The wording they give to Koreans is much simpler, and is the same as above but reversed:


http://www.hmrc.gov.uk/manuals/dtmanual/DT11360.htm (http://www.hmrc.gov.uk/manuals/dtmanual/DT11360.htm)
"DT11357 - Korea: Teachers and research workers (doube taxation agreement)

Under Article 20 of the agreement, a teacher or researcher from Korea will be exempt from United Kingdom tax on his remuneration for teaching or research for a period not exceeding two years from the date of his first arrival in the UK to teach or undertake research. But the exemption is available only if: (a) his visit to the UK does not exceed two years and (b) he remains taxable in Korea on the remuneration he earns in the United Kingdom."


The double taxation agreement is not an incentive put in place so people will come and work in Korea... It's not a bonus I know they have something like this out in the middle east, but it's just not the case here.

So, why do some many people think it's a tax free incentive??? Well, if you get the residency certificate and then don't tell them (UK tax office) about your earnings (here in Korea)... you will on paper owe them (UK tax office) nothing. But only in the same way that if you are self employed and fudge the numbers, you'd owe them less too. Obviously they have less control of affairs outside of their jurisdiction, so for the time being you might (highly likely) get away with it. But it could bite you in the ass later. In the states, they call it being Audited... I've never had the pleasure in the UK. But I imagine it involves having a nice chat with a tax agent and then they work out what you'd owe plus a fine, and one massive headache.
Like I said, you probably won't get caught... It's up to you.

What is the residency certificate?
Originally, I thought it this just proved that you had lived in a country. I thought my school needed this, much like a birth certificate to prove where I was living before. But, they wanted a certificate for the length of my contract that I hadn't yet worked.
This piece of paper basically says to the Korea government that you are technically resident in the UK for purposes of tax.

I repeat! A residency certificate basically says, for the purpose of taxes, you reside in the UK.
If you've already paid some Korean tax, you can get a copy of this information and they will take that in account in the UK as tax credits and reduce what you owe to them.

If you've already been in Korea for more than 2 years, or plan to stay here for more than two years, then the double taxation agreement is of no use to you. I think you could technically use it for the first 2 years if you wanted... But... from what I can tell, the agreement is only really beneficial to the Koreans, since UK tax is much higher.

If you're staying less than 2 years, you can use the double taxation agreement. But, well... Why would you. It's cheaper to pay the Koreans, and after all, it's their public services that you're using.

If you're outside of the UK for the whole tax year, April - April... you also, count as a non-resident for the purposes of tax. Unless you have the residency certificate. So, stay out of the country for that amount of time and don't pay the UK taxes. HMRC doesn't care. It's nothing to do with them. Remember though if you return to the UK before the end of the TAX year (they don't care if you were out of the country for 365 days, or Jan 1st - Jan 1st...l they care about April 5th - April 5th), then you have to pay taxes back on what you've earned so far for that tax year. If you started in March, it's best just to take an extended holiday at the end of your contract and return in April.

Quotage:
http://www.hmrc.gov.uk/international/return-uk.htm (http://www.hmrc.gov.uk/international/return-uk.htm)
"Returning to the UK less than a full tax year since your departure

If you were out of the country for less than a full tax year (6 April to 5 April) you will have remained UK resident while you were abroad. This means you will have to pay tax on your UK income and gains, and you may also have to pay UK tax on your foreign income and gains for the whole tax year. Follow the link below to find out how residence affects your tax."

Bloody cheeky of them, but there you go!


Also, please note, that if you want your UK pension, you should still top up your contributions. People usually mix this up with taxes, but it's a separate kettle of fish. As is the annoyance that UK peeps have to pay contributions to the Korean pension plan, but don't get anything back, while other countries get a nice lump refund at the end of their contract. I'll work that one out later.
Here's a link to work out paying contributions to your state pension from abroad http://www.hmrc.gov.uk/international/ni-abroad.htm (http://www.hmrc.gov.uk/international/ni-abroad.htm)

Hope this clears things up. Here are some links so you can read for yourself.

Also, if anyone has time. Give the HMRC a call and clear up the extent in which they record residency certificate requests at present. If they don't track that. Then yeah. You really could just hand one in and illegally avoid paying taxes in both countries without worry.

Sources: Korea - UK Double taxation convention
Specifically Article 20
http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf (http://www.hmrc.gov.uk/taxtreaties/in-force/korea-dtc.pdf)

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/NEWS/cert-of-residence.htm (http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/NEWS/cert-of-residence.htm)

http://www.hmrc.gov.uk/manuals/dtmanual/DT11357.htm (http://www.hmrc.gov.uk/manuals/dtmanual/DT11357.htm)
Thanks for this very informative post! I've been in Korea since feb 2014 so when i go back in february 2015 i will still be within the tax year..are the tax office likely to know if ive been earning? And if so is it likely to be more than a few hundred pounds considering I've been paying tax here? Dunno if it would be cheaper to travel in europe for a month...

They won't have a clue and won't care. Say you've been travelling if asked. If pushed, get someone (parents?) to write a letter saying they organised some money to send you travelling for a year or two. Who can disprove that without checking every single country in the world over 200 quids worth of tax?

Like I said, they seriously won't care.
Title: Re: UK/English Tax Q&A
Post by: RDW27 on January 15, 2015, 10:58:59 am
Robyn 2014: I doubt HMRC would check, know or chase you if you've earnt money abroad, certainly not for the relatively small amounts we're talking about, however if they ask you to submit a tax return I wouldn't lie about it, as that could be deemed as tax fraud etc. I don't think they would check and I'm sure you could get away with saying you've been travelling, but you wouldn't want it coming back to get you further down the line (for example do they have access to bank accounts etc?). Instead just hope that you don't get asked to send a tax return in. I know loads of people who have taught abroad and they haven't had to submit a tax return - by being away you basically just drop off their radar completely.

However I got a residency certifcate which basically told HMRC I was moving abroad and as such they asked me to fill in a tax return for 2013/14 to take into account the one month's pay in March I received (I avoided paying the tax though on a thing called split year treatment). If you didn't get a residency certificate I would guess you've just dropped off their radar completely - the residency certificate seems to cause most of the problems.

I'm actually doing a months travelling after the contract finishes, partly to do with tax, as it will mean I am out of the country the whole tax year and automatically non-resident. This means that I shouldn't have to submit any sort of return for 2014/15. To be automatically non resident I think you have to spend less than 16 days in the UK in a tax year.

If you've been paying Korean tax I wouldn't worry about it too much because if HMRC do ever chase you and you do need to pay, they will take off any korean tax you have already paid, from what you owe them, so I would make a copy of your payslips just in case. Given the higher allowances back in the UK I doubt there would be too much in it. 11 months pay at 2.1million w would probably only amount to about 700-800pound in tax, and they would take the korean tax off that.

I suspect one trigger might be if you go home and get a job straight away and get paid through PAYE before the end of the tax year, because you'll pop back up on their radar and they may want to know what you've been doing the rest of the year.

I wouldn't worry too much about it, you probably won't get asked to submit a tax return unless you got the residency certificate, and if you've been paying korean tax, then you'll probably only owe them a few hundred quid at most.
Title: Re: UK/English Tax Q&A
Post by: YoungMin on January 15, 2015, 11:48:36 am
Slightly off topic but having evaded Student loans repayments for 3 years I got a phone call asking to update my details. Turns out the only reason they bothered to contact me was because I hadn't turned up on the HMRC PAYE system in a long time.

Also very generous of the student loans company to lower the repayment threshold from 16,900 to 13,500 for Korea. 

If you are interested I haven't been fined or anything like that either for not paying a single penny for the 3 years since graduation.  :P

On topic: Pay tax in Korea.
Title: Re: UK/English Tax Q&A
Post by: RDW27 on January 15, 2015, 12:26:10 pm
Slightly off topic but having evaded Student loans repayments for 3 years I got a phone call asking to update my details. Turns out the only reason they bothered to contact me was because I hadn't turned up on the HMRC PAYE system in a long time.

Also very generous of the student loans company to lower the repayment threshold from 16,900 to 13,500 for Korea. 

If you are interested I haven't been fined or anything like that either for not paying a single penny for the 3 years since graduation.  :P

On topic: Pay tax in Korea.

They got in contact with me pretty quickly once I left for korea. I was also doing some unpaid work a few years ago and within about two months of not paying PAYE they sent me a letter asking what I was doing. I only paid student loans because they were threatening some pretty hefty fines each month, as it happens the repayment for me is about 10pound a month! Feel pretty sorry for a lot of the Americans here having to send home $$$'s of dollars each month to pay their student loans, 10 pound a month  :P
Title: Re: UK/English Tax Q&A
Post by: Robyn2014 on January 16, 2015, 04:43:49 pm

Thanks for this very informative post! I've been in Korea since feb 2014 so when i go back in february 2015 i will still be within the tax year..are the tax office likely to know if ive been earning? And if so is it likely to be more than a few hundred pounds considering I've been paying tax here? Dunno if it would be cheaper to travel in europe for a month...
[/quote]

They won't have a clue and won't care. Say you've been travelling if asked. If pushed, get someone (parents?) to write a letter saying they organised some money to send you travelling for a year or two. Who can disprove that without checking every single country in the world over 200 quids worth of tax?

Like I said, they seriously won't care.
[/quote]
Okay great thanks, yea I doubt they will ask where I've been!
Title: Re: UK/English Tax Q&A
Post by: Robyn2014 on January 16, 2015, 04:50:59 pm
Robyn 2014: I doubt HMRC would check, know or chase you if you've earnt money abroad, certainly not for the relatively small amounts we're talking about, however if they ask you to submit a tax return I wouldn't lie about it, as that could be deemed as tax fraud etc. I don't think they would check and I'm sure you could get away with saying you've been travelling, but you wouldn't want it coming back to get you further down the line (for example do they have access to bank accounts etc?). Instead just hope that you don't get asked to send a tax return in. I know loads of people who have taught abroad and they haven't had to submit a tax return - by being away you basically just drop off their radar completely.

However I got a residency certifcate which basically told HMRC I was moving abroad and as such they asked me to fill in a tax return for 2013/14 to take into account the one month's pay in March I received (I avoided paying the tax though on a thing called split year treatment). If you didn't get a residency certificate I would guess you've just dropped off their radar completely - the residency certificate seems to cause most of the problems
I'm actually doing a months travelling after the contract finishes, partly to do with tax, as it will mean I am out of the country the whole tax year and automatically non-resident. This means that I shouldn't have to submit any sort of return for 2014/15. To be automatically non resident I think you have to spend less than 16 days in the UK in a tax year.

If you've been paying Korean tax I wouldn't worry about it too much because if HMRC do ever chase you and you do need to pay, they will take off any korean tax you have already paid, from what you owe them, so I would make a copy of your payslips just in case. Given the higher allowances back in the UK I doubt there would be too much in it. 11 months pay at 2.1million w would probably only amount to about 700-800pound in tax, and they would take the korean tax off that.

I suspect one trigger might be if you go home and get a job straight away and get paid through PAYE before the end of the tax year, because you'll pop back up on their radar and they may want to know what you've been doing the rest of the year.

I wouldn't worry too much about it, you probably won't get asked to submit a tax return unless you got the residency certificate, and if you've been paying korean tax, then you'll probably only owe them a few hundred quid at most.
Yea if I don't travel, I'll.definitely stay off their radar by not working until the next tax year.  ;D I may be self employed after april 5th so I guess that's a possible trigger also for asking about tax returns. I do fancy a few weeks in Europe so I may just do that after a 14 day visit to UK. Hearing all the difficulties the residency certificate causes kind of glad I was too disorganised to get it.  ;D
Title: Re: UK/English Tax Q&A
Post by: Anon1987 on January 20, 2015, 02:52:24 pm
I obtained a Certificate of Residence in January 2014 prior to my school contract starting in Korea the following month.  I have renewed my contract for another year, so do I need to obtain a new Certificate of Residence or does the one I have from last year still stand?
Title: Re: UK/English Tax Q&A
Post by: fshgirl76 on January 20, 2015, 02:56:33 pm
I obtained a Certificate of Residence in January 2014 prior to my school contract starting in Korea the following month.  I have renewed my contract for another year, so do I need to obtain a new Certificate of Residence or does the one I have from last year still stand?

It's valid for 2 years. I didn't have to re-submit anything (I'm EPIK).
Title: Re: UK/English Tax Q&A
Post by: Bluenose on January 23, 2015, 12:32:15 pm
Question...
Brits who have stayed for more than two years, and thus have had to pay tax in their third year, how much have you usually paid?
My school claiming I have to pay 1.3 mil here, something don't seem right
Title: Re: UK/English Tax Q&A
Post by: akempster88 on January 27, 2015, 02:23:57 pm
Question...
Brits who have stayed for more than two years, and thus have had to pay tax in their third year, how much have you usually paid?
My school claiming I have to pay 1.3 mil here, something don't seem right

I pay a little each month and have to pay a lump sum of about 600k
Title: Re: UK/English Tax Q&A
Post by: Robyn2014 on January 30, 2015, 04:04:03 pm
I think in truth it makes little difference financially as to which way you go. Of course tax in the UK is much higher, basic rate being 20p in the pound. However the tax free allowance is around 7,000 pounds ish, so the actual amount of income you will be taxed on is a lot less than many think. Last time I did the calculation between the two, it wasn't much difference (less than 100) iirc. Plus some people want to maintain their Tax Contributions and NI contributions for State Pension purposes.

Anyways, whatever boat people are in, I wouldn't worry too much, and I doubt HMRC are gonna be chasing too many of us over a few hundred quid, although I wouldn't hold my breath either.
I have just read that if you want do go back to University you are classed as an international student for the purpose of fees since you need to have been 'ordinarily resident' in UK for the 3 years prior to date of course. As i stated before i havent claimed residency certificate and was hoping to get away with paying income tax, but now this changes everything- my question is now since I am going to be back more than 16 days before the tax year ends and therefore considered as resident in the eyes  of HMRC will this allow me to claim 3 years resident in UK when applying for my Masters?
Title: Re: UK/English Tax Q&A
Post by: gonzouk on January 30, 2015, 11:22:18 pm
Question...
Brits who have stayed for more than two years, and thus have had to pay tax in their third year, how much have you usually paid?
My school claiming I have to pay 1.3 mil here, something don't seem right

I've been paying a certain kind of tax each month and I also have to pay a final lump sum this year as I've been here 3 years.

I will have to pay one lump sum which is a tax adjustment fee of around 750,000원

Also I remember there is a Local Residency Tax for certain areas which differs depending on the area in which you live. There are so many little things that you could've been paying or that they left out and are now starting to add on

Personally I try to maintain a good relationship with Administration Staff and trust them to do their job.. It's easier that way unless someone could explain in English, or give a breakdown of pay. I know that's not a luxury I have here and definitely not within staff's abilities / time constraint.

I was told by my Co Teacher that if you change your workplace every two years you won't be taxed.. How true that is, I really don't know? Not to start any rumours, or go off topic, but that was genuinely said to me this afternoon.  I'm changing schools and won't pay tax next year apparently...
Title: Re: UK/English Tax Q&A
Post by: JennyC520 on July 01, 2015, 01:49:17 pm
I HATE TAX. OR ANYTHING TO DO WITH MONEYYYYY. JUST TAKE ITTT AND BE DONEEEE.  :sad:


Anyway, I came here in Aug 2013, didn't fill out a p85, but applied for and submitted a residency cert to my school and do not pay tax here. I also have not been paying tax in UK.
When I decided to accept the EPIK job, it was such a last minute decision that I didn't research anything, just packed and left! I was just advised (cant remember online? or via recruiter) to hand in a residency form to be exempt from Korean taxes, so I did that. I didn't even think about UK tax... we rarely have to worry about tax when you're on the PAYE system so UK tax didnt even come to mind.
Only started worrying abut tax when I received a penalty for not filling in a self assessment for tax years 2013-2014. Called HMRC, answered a few questions, told them I live and work abroad and they said I don't qualify for self assessment so have cancelled the record for self assessment. SO I thought I was fine on the tax issue, considering I told them I work abroad..they didn't mention anything about whether I pay taxes anywhere..

BUT a UK friend here just told me he filled in the self assessment and has to pay 2000 UK tax for the year. I'm guessing It'll be similar for me then? I totally don't mind paying, if I owe it, I owe it. AND from reading these past 8 pages, seems cos I was abroad for at least 1 tax year (2014-2015), so hence, not a resident, they can't tax me on the income for that year. (BUT I applied for that residency form..GAH, which might still make me a resident).

Anyway, My question here is, has anyone been in a smiliar situation as me? I'm returning to the UK in September and wondering what to expect when I go back.., what forms do I have to fill in? what fines are gna hit me? I don't mind, if i gotta pay, i gotta pay. This has given me so much stress and headaches, I'd rather just give the money and be done with it all!

Oh, I also pay overseas student loans too, so the gov does know I'm abroad and earning etc if that makes a difference.
Title: Re: UK/English Tax Q&A
Post by: dewsbury89 on July 01, 2015, 02:19:18 pm
@jennyC520


My situation here is very similar to yours - I came here from the UK with EPIK in sept 2013, and didn't file any kind of paperwork when I left. I got the same letter warning me that I hadn't done a self-assessment for the 2013-14 tax year.

When I called them up and spoke to them they told me I didn't have to pay back any taxes or fill out any forms. We are tax exempt for 2 years here, so I really don't know why he would have to pay back two grand like that. Is it possible that his financial situation is different to yours in some way?

 If the people you spoke to when you phoned HMRC said that you don't have to pay it, then I wouldn't worry about it too much.
Title: Re: UK/English Tax Q&A
Post by: JennyC520 on July 03, 2015, 03:01:42 pm
@jennyC520


My situation here is very similar to yours - I came here from the UK with EPIK in sept 2013, and didn't file any kind of paperwork when I left. I got the same letter warning me that I hadn't done a self-assessment for the 2013-14 tax year.

When I called them up and spoke to them they told me I didn't have to pay back any taxes or fill out any forms. We are tax exempt for 2 years here, so I really don't know why he would have to pay back two grand like that. Is it possible that his financial situation is different to yours in some way?

 If the people you spoke to when you phoned HMRC said that you don't have to pay it, then I wouldn't worry about it too much.

I believe he also handed in the residency form so he is exempt here. But many people are saying that if you don't pay in Korea, you have to pay in England. So I think that's why he has to pay back 2k in UK, but, like you said, I'm not 100% sure of his circumstances.
When I called them, they didn't ask if I paid tax anywhere...nor did I mention it to them actually, so paying/repaying tax wasn't touched upon during my call to them.
Title: Re: UK/English Tax Q&A
Post by: Imogen1991 on July 03, 2015, 03:07:53 pm
I never got my proof of residency so i just pay tax here, it's not much.  HMRC made things super difficult for me in getitng the form so i just gave up  :rolleyes:
Title: Re: UK/English Tax Q&A
Post by: the_test on July 03, 2015, 04:43:06 pm
Same here, much less hassle.