UK Tax

[Basil Fawlty]

Hi
I am a British citizen and have been living and working in Singapore since June 2004.

I am returning to the UK in June 2005.

Recently I have been informed that whilst I will not have to pay UK tax from June 2004 to April 2005 because I have exceeded the 180 day threshold, that I will have to pay UK tax on earnings during April, May and June 2005. I understand that I must pay the difference to make up from Singapore taxation level to UK level.

This is a bummer because I was not advised of this before I took on the job. I know it's only a few months but is there a way of avoiding having to pay the additional 20 odd percent tax?

Any thoughts or advice would be very much appreciated.

Thanks

[ringo100]

I don't think there is except for staying in Singapore longer i.e. more than 183 days. Remember though that you'll have no NI so the difference will be between your Sing rate (probably 10+%) and either 22% or 40%. I think you may also get your full years tax allowance as well.

The only other thing I could think of would be getting your employer to pay you a big bonus in March 04 (tax free in UK) and then reducing your April-June salary down to a minimum so you only pay tax on that. If you are staying with the same employer they may do it to keep you happy as it should be no difference to them.

[Manuel]

Basically you have to be out of the UK from April to April to escape paying UK for that tax year.

If you arrived in June 2004 then you are liable to pay the difference between UK and Singapore on your return to the UK for the 2004 tax year. So even if you leave in June 2005 you will have to pay UK for all your earnings!

Only if you stay to April 2006 will you not have to pay UK tax for 2005.

Very unfair to be out of the UK for a whole year but still have to pay their taxes!

[Jianada]

It is unfair. In Canada you have to apply to stop paying tax no matter how long you've been out. IN order to be awarded this you have to give up most things, such as your car, home, bank accounts, driver's license, etc.