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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 3613
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based)
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Im taking up a job based on 28/28 rotation in China. The company

Resolved Question:

I'm taking up a job based on 28/28 rotation in China. The company pays tax form my gross salary in China and a I receive the net amount. Will I still be liable for tax in the UK. Thanks
Submitted: 1 year ago.
Category: UK Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello, if you have any questions or need further clarification after reading my answer please let me know.

 

 

Please advise -

Are you UK resident for tax purposes?

Do you file a tax return at present?

 

Many thanks

Customer: replied 1 year ago.


I am a UK resident and prsenlty do file tax returns. The role is 28 days on 28 days off so I will be back in the UK every other month for apprx 26 days.


 

Expert:  taxadvisor.uk replied 1 year ago.

Jason, thank you for your prompt reply.

 

As UK resident for tax purposes, your worldwide income is chargeable to UK tax.

yes, you would be liable to income tax on your foreign earnings.

 

There is a double tax agreement between UK and China.

You would claim relief against UK tax for foreign tax paid on your earnings in China.

 

More information on this can be found in Sec 9.2 on Page 53 of HMRC6 here

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

 

If you need more information please let me know before you rate my service.

 

I hope this is helpful and answers your question. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

 

I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page.

 

Customer: replied 1 year ago.


The agency who I'm working pay me USD1386 a day and I actually my net amount that I receive is 850USD. Does this mean that I will also have to pay tax on the USD850 in the UK. Then when I file my tax return I can state that I have paid tax to China and then will not need to pay any additional tax at the end of year to the UK.

Expert:  taxadvisor.uk replied 1 year ago.

 

Jason, thank you for your reply.

 

You will show your gross earnings (based on USD1,386 a day) when filing your tax return. You will also complete supplementary pages SA 106 - Foreign and claim for foreign tax credit relief. Your UK tax will be calculated using your gross pay and not net pay.

 

You can find out more on SA106 - Foreign here

http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=EZbpjD2hV2M&formId=3188

 

I hope this is helpful and answers your question. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

 

I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page.

 

Customer: replied 1 year ago.


Ok so each month in theory the net amount I receive is after UK tax once I've declared it at then end of the tax year and the money I've paid in China tax should cover my UK tax payment once I've declared my earnings and tax payments in China. Sorry to be a pain but its my first overseas assignment and I wan tot be sure its worth the move


 

Expert:  taxadvisor.uk replied 1 year ago.

Jason, thank for your reply...

 

Lets suppose your earnings (all from job in China) after personal allowance of £9,440 give rise to UK tax of £8,000. You have paid foreign tax of say £6,000 on these earnings.

 

In this scenario you will have to pay an additional sum of £2,000 to UK tax authorities.

 

I hope this is helpful and answers your question. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 3613
Experience: FCCA - over 35 years experience as a qualified accountant (UK based)
taxadvisor.uk and 2 other UK Tax Specialists are ready to help you

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