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Tax Robin
Tax Robin, Tax Preparer
Category: UK Tax
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Experience:  15 years experience with H & R Block in International Tax Law
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Im a German citizen who moved to Scotland last year for a

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I'm a German citizen who moved to Scotland last year for a master's course and is about to graduate. Now I'd like to stay (i.e. live) in Scotland for at least the next three years.

At the same time I'd like to work remotely for my current employer in Berlin, Germany. How does the tax work (also pension, health insurance?). Will I be doubly taxed or do I just have to pay tax in either the UK or Germany?

In the end what I'd really like to know is: When I earn 25 Euros per hour in the German company while living in the UK, how much will remain after taxes?
Submitted: 1 year ago.
Category: UK Tax
Expert:  Rachel-Mod replied 1 year ago.
Hello,

I'm Rachel, and I’m a moderator for this topic.
 We have been working with the professionals to try to help you with your question. Sometimes it may take a bit of time to find the right fit. 

I was checking to see if you had already found your answer or if you still needing assistance from one of the professionals.

Please let me know if you wish to continue waiting or if you would like for us to close your question.

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Rachel
Customer: replied 1 year ago.


I'd like to continue waiting, please.


 

Expert:  Rachel-Mod replied 1 year ago.

Hello,

Thank you, XXXXX XXXXX continue to look for a professional to assist you. Please let me know if I can be of any further assistance while you wait.

Best,

Rachel

Expert:  Tax Robin replied 1 year ago.
Hello,
Thank you for your patience. I think the waiting has to do more with the fact that Scotland tax residency is involved, so that part of your question is still going to be somewhat open ended.
The other part about where you will pay tax is set by the tax treaty between the UK and Germany.
Article 14
Income from employment
1) Subject to the provisions of Articles 15, 17, 18 and 19 salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting
State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

You will be a tax resident in the UK because of your presence there (more than 183 days in the tax year)and will be taxed in the UK.
The Scottish rate of income tax, as introduced by the Scotland Act 2012, will be charged on the non-savings income of those defined as Scottish taxpayers. The rate paid by Scottish taxpayers will be calculated by reducing the basic, higher and additional rates of income tax levied by the UK Government by 10 pence in the pound
and adding a new Scottish rate set by the Scottish Parliament.
Tax is payable at the basic rate of 20 per cent on taxable income up to £32,010.
If you have taxable income of more than £32,010 but less than £150,000, you will have to pay a higher rate of 40 per cent tax on the amount above £32,010 and below £150,000.

Most taxpayers living in the UK on a day to day basis are entitled to personal allowance. The basic personal allowance is £9,440.
PAYE normally allows for this throughout the year. The rest is your taxable income.

I sincerely XXXXX XXXXX above information is helpful as you look to your employment and tax future in Scotland.
Customer: replied 1 year ago.

So if I was to earn 50000 euros (i.e. ~ 42,000 pounds) I'd have to pay 40% tax on 42,000 - 9,000 = 33,000 pounds? Which would mean I'd have to pay around 13,000 pounds in tax leaving me with 29,000 pounds net?

Expert:  Tax Robin replied 1 year ago.
You would have to pay a higher rate of 40 per cent tax on the amount above £32,010 and below £150,000.
7196 would be the tax on the amount over 32,010. 50000 - 32010 = 17990 x 40% = 7196. Plus the 20% on the 32010 amount (= 6402) So 6402 + 7196 = 13598.
Tax Robin, Tax Preparer
Category: UK Tax
Satisfied Customers: 7736
Experience: 15 years experience with H & R Block in International Tax Law
Tax Robin and 5 other UK Tax Specialists are ready to help you
Customer: replied 1 year ago.

Thank you very much! So how does the self allowance factor into this? That would only happen if I'd have less than 9,440 pounds net left, I suppose?


 


In any case that's pretty much what I needed to know.


Thanks again!

Expert:  Tax Robin replied 1 year ago.
Nearly everyone who lives in the UK is entitled to an Income Tax Personal Allowance. This is the amount of income you can receive each year without having to pay tax on it.
If you already pay tax through your job or pension, or if you complete a Self Assessment tax return, you should receive a Personal Allowance automatically.
Your employer would apply your correct amount but is that is not done then the allowance would be claimed when you file.

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Tax Robin
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15 years experience with H & R Block in International Tax Law