Hi. I work fulltime in the UK - pay tax via PAYE so don't have to think about it. I've been asked by a Singapore company to do some consultancy for them - essentially in my spare time. They are proposing to just send money to my UK bank account every month - they do not think I should be paying tax in Singapore. It'll probably be a 3-6 month contract. How will this payment be monitored by authorities (HMRC) here? Will I have to pay tax on it at my highest rate of tax and now handle this through self-assessment? This tax will potentially be so high that it's barely worth me doing the work! Thanks in advance for your help. Rich.
System of Law: England-and-Wales
I haven't done anything yet.
Hi.You will need to register as a self-employed consultant if you take up the offer which you can find out how to do here. If you run your self-employment to a 5 April year end, that will coincide with the end of the tax year and at the end of your first year any tax and national insurance contributions will be payable on 31 January following the tax year end.Depending on the level of the liability in relation to the amount of tax you pay overall for a tax year on all sources, you may have to make advance payments on account of the following tax year on 31 January and 31 July. The level of tax you will have to pay will be dependent on your earnings as an employee so it will be 20%, 40%, 50% or a combination of one two or more of those rates.Take a look here for information on tax rates and bands and here for information on class 2 and class 4 national insurance rates and bands.Let me know if you have any further queries.
Thanks for that.
The costs of setting up a limited company and dealing with the annual compliance procedures in terms of both time and money if you employed an accountant would east into any tax savings. You would still have the problem of extracting money from the company in a tax efficient manner. If the assignment became a longer term venture, then it might be worth considering opering it through a limited company.
Inc Tax, CGT, Corp Tax, IHT, VAT.
I guess in the end I'm really thinking about how much hassle any of this is worth for 6 months of consulting where they are just going to wire money directly into my UK bank account and not report it to HMRC. I understand you're not here to advise me to do something unlawful though!
I can't do that I'm afraid.If you reported it as self-employed income, you would pay tax of £4,800 and £351.60 Class 4 NIC. So, in net terms, you end up with £6,848.40. Only you can judge if it's worth doing the work and the amount of time it will take.Don't click accept as you have already paid.TonyTax41099.574440544