Expatriate tax ebook - United Kingdom

Facts and figures

Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates
Sample income tax calculation

Pre arrival procedures
Visitors from outside the EU will need a work permit to work in the UK. Visas may be required depending upon country of origin. To work in the UK you will need to have a social security number, usually called a National Insurance Number (NINO).

Employment visas
Obtaining a visa is usually the preserve of the law firms. Grant Thornton UK LLP can recommend a number of specialist law firms in this area.

Tax year
The start of the tax year in the UK is 6 April and it runs to 5 April each year.

Tax returns and compliance
Tax return filing date is 31 October for paper returns and 31 January for on-line filing. There are penalties for late filing of a return. There is interest and surcharges on late paid tax.

Income tax rates
For the tax year ending 5 April 2012, tax on employment income is taxed at rates of 20%, (first £35,000), 40% (next £115,000) and 50% (on excess). A personal allowance may also be available (£7,475 in 2011/12) but this is not available to high earners or those excluding over £2,000 from UK tax under the remittance basis

Sample income tax calculation

Client schedule to employment pages

						£
Base Salary						110,000
Bonus						24,900
Car allowance						4,000
Medical benefit						1,500
Housing allowance						15,000
Total earnings						155,400

Less:	Accommodation					(15,000)
	Subsistence					(3,000)
	Travel					(2,400)

Net earnings						135,000
Less: Overseas workdays relief
	Days worked	o/seas	total
		55	240			(30,938)
Overseas pension contributions						(7,470)

Net taxable income						96,592.00

Summary:
						£
Net total earnings						96,952.00
Gross up						0
Total taxable earnings						96,592.00

Proof:
		£	£			£
Taxable earnings
Less: Personal allowance		(7,475)
Taxable income		89,117
			35,000	@	20%	7,000
			54,117	@	40%	21,646.80
			0	@	50%	0
			89,117

Net tax liability						28,646.80

Information about UK:

tax planning opportunities

Last updated 16 June 2011

This information has been provided by Grant Thornton UK LLP, a member firm within Grant Thornton International Ltd, and is for informational purposes only. Neither Grant Thornton UK LLP nor Grant Thornton International Ltd can guarantee the accuracy, timeliness or completeness of the data contained herein. As such, you should not act on the information without first seeking professional tax advice.

Grant Thornton International Ltd and the member firms are not a worldwide partnership. Services are delivered independently by the member firms.
Disclaimer

Contact us

For more information on expatriate tax in the UK, contact Clive Fathers.

Related websites

Her Majesty's Revenue and Customs (HMRC)
Directgov - the official government website for citizens

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