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Tony Tax
Tony Tax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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The company I work for paid 28.2% tax (approx £74,000.00) to

Resolved Question:

The company I work for paid 28.2% tax (approx £74,000.00) to the Azerbaijan Goverment on my behalf. I earned approx £180,000.00. I stay in the uk and work a 4 weeks away & 4 weeks at home rotation.
How much tax can I expect to pay in the UK?
Submitted: 11 months ago.
Category: UK Tax
Expert:  Tony Tax replied 11 months ago.
Hi.

Which tax year are those earnings for? The UK tax year runs from 6 April to 5 April. Is the company you work for a British company or an Azerbaijan company? Are you employed or self-employed?
Customer: replied 11 months ago.

2012 - 2013 and it is a british company. Self employed

Expert:  Tony Tax replied 11 months ago.
Thanks.

Leave this with me while I draft my answer.
Customer: replied 11 months ago.

Ok

Expert:  Tony Tax replied 11 months ago.
Hi again.

I've just noticed a discrepancy. You say you paid tax in Azerbaijan of £74,000 or 28.2% of your earnings. That doesn't match up with earnings of £180,000. Were your earnings pre-tax £254,000?
Customer: replied 11 months ago.
The two figures together were approx £260,000 yes.
Expert:  Tony Tax replied 11 months ago.
Thanks.

I'm drafting my answer now.
Customer: replied 11 months ago.
Ok
Expert:  Tony Tax replied 11 months ago.
Hi again.

The UK tax on self-employed earnings of £260,000 for 2012/13 will be £108,126.00 and the Class 4 National Insurance Contributions will be £7,488.50 so your total gross liability will be £115,614.80. As you have paid tax in Azerbaijan of £74,000.00, your net UK tax and NIC liability is £41,614.80. This will be payable on 31 January 2014.

If you are still self-employed, your will have to make payments on account of your tax and NIC liability for 2013/14 of £20,807.40 on each of 31 January 2014 and 31 July 2014. That's assuming you will continue to pay tax in Azerbaijan. You can apply to reduce your payments on account if your 2013/14 earnings are less than those for 2012/13.

If you incur expenses, you may be able to claim these against your earnings which will reduce your tax and NIC liability. You might ask your colleagues what they do in this regard.

Your self-employed earnings are covered by Article 14 of the UK/Azerbaijan tax treaty here. Article 22 allows you to offset tax paid in Azerbaijan against your UK tax liability.

I hope this helps but let me know if you have any further questions.
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 14013
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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