Hi there. Im currently resident in Jersey (and have been for…

Hi

Thanks for your response

That's great that you have no direct ties, which does not involve you being considered for UK tax on all income (UK and abroad)

However as this income will arise in the UK, it will remain liable to tax in the UK, so you will need to set yourself up as self employed with HMRC and I have added a link here for you to do this.

https://online.hmrc.gov.uk/registration/newbusiness/introduction

And this is irrespective of whether you spent 10 days or all 365 days in the UK.

But to remain just liable for UK tax on the UK income then make sure no more than 90 days are spent in the UK (and 48 weeks x 2 = 96 days so do keep a count to stay under 91 days)

If a UK citizen (so you do not need to be treated as resident) you remain entitled to UK personal tax allowances (currently £9440 tax free a year then 20% between £9441 and £42475) ) But there might be some National Insurance to consider, if this income is more than £5725 a year

(And this is net self employment - so turnover less expenses)

So be prepared to automatically expected to pay Class 2 National Insurance (rate of £2.70 a week) which contributes towards a state pension.

Of course if your net income from this freelance work will be less than £5725 a year, then you can apply for what is known as a small exception certificate, due to the low level of earnings, and remain exempt from Class National Insurance.

Then there is Class 4 National Insurance and this is calculated and charged at the same time as tax, and the first £5825 is National Insurance free, and any amount between £5725 and £42475 is liable to 11%

HMRC ask for self assessment tax returns to be completed after each 5th April, to declare income for the previous year ( so for 2014 self assessment the income earned from 06/04/2013 to 05/04/2014) and then any tax and national insurance due is paid by the following 31st Jan (so in this example by 31/01/2015)

If you have more than 90 days in the UK, then you will have to declare ALL income, but if less than just the UK income arising.

But if you do have a tax liability, then due to the double taxation treaty that we have with the Channel Islands, you can then declare to them the UK tax suffered, so you are, in essence, not charged tax twice on the same income.

So note that you will be required to declare the income/expenses and tax suffered to the Jersey tax authorities.

Now onto your question regarding expenses. I am afraid the flights will be a personal cost, and not business related expense, as this will merely put you in the place to undertake your freelance work, rather than having been incurred during the process of providing your trade.

Allowable costs would be advertising, phone costs, web site, internet costs, stationary, travel expenses to visit clients, banking costs etc etc

Do feel free to ask any follow up questions, but it would be appreciated if you could rate (or accept) the level of service I have provided

Thanks and good luck

Sam

Hi Kelly

Thanks for your follow up questions

Your statements 1 through to 5 are correct.

a) In the instance you provide, which happens with frequency, then HMRC would either

i) tax you on your worldwide income and then you declare all the tax suffered against your Jersey liability (so full double taxation comes into play for your Jersey position) OR

2) Would agree to just charging you on your UK income

But this would be up to HMRC to determine which direction they wish to take this, and this is something you would need to discuss with them as I have seen both instances used. Because the complication arises as you are Resident in the UK for enough days to become fully liable in the UK and are a UK citizen but, clearly spend more time elsewhere and have a domicile (through choice) in Jersey.

b) Yes - there are two sets of National Insurance for self employed individuals, this was to being the charge in line with employed individuals. But the Class 2 flat rate, contributes towards a basic state pension and the Class 4 is paid into the government coffers for health care, schools. fire services etc

But I do apologise I advised 11% on everything from £5,725 to £42,475 when in fact its £7755 to £42475 at 9%

c) No - you only are liable to National Insurance on the self employed income NOT the Jersey income , and the Jersey income is NOT added to the UK freelance work to establish how much National Insurance is due.

Thanks

Sam

HI

Thanks for your response

Usually HMRC accept at face value the information provided on the self assessment tax return, but for safeguard measures, I would advise keeping flight tickets/ferry tickets (and any online documents if you book online) this will then outline the times you were in the UK should they be asked for.

Thanks

Sam

HI Kelly

You are very welcome, and you have a great weekend too.

Thanks

Sam