In a recent article, ‘5 Common Misconceptions About The UK Taxation Of Expats’, we took a look at 5 of the most popular misconceptions people had about the taxation of expats here in the UK. From the 183 days misconception, to the misconception about expats and foreign employees working in the UK not having to pay UK social security taxes, we cleared up the misunderstandings and now we are back with 5 more common misconceptions about the UK taxation of expats. Let’s get started:
5 More Common Misconceptions About The UK Taxation Of Expats
The “Share-Related Income” Misconception – business owners believe that share options, restricted shares and others do not need to be reported on their Form 42 for expats. However, employers are required to report any share-related income earned by expats working in the UK.
The “Benefits And Expenses” Misconception – another popular misconception is that if an employee is receiving offshore benefits and expenses, that they do not need to report them on their UK tax reports. This is untrue and it could lead to penalties and fines if ‘taxable benefits and expenses for overseas expats working in the UK’ are not reported.
The “Overseas Pensions” Misconception – some expats believe that pensions schemes outside of the UK do not pertain to them. Expats working in the UK and contributing to a non-UK pension can end up having tax issues here in the UK.
The “Personal Tax” Misconception – if an expat working in the UK becomes chargeable to UK tax, the employer will have to operate both PAYE and NIC taxes in the UK. Many people believe that this is the responsibility of the individual and not the company, when, in fact, it is the other way around.
The “Immigration Rules, Corporate Tax And Income Tax” Misconception – a common misconception is that immigration rules, corporate tax and income tax are all separate factors. Income tax, corporate tax and immigration rules are all separate. In fact, they are all closely related and should be considered any time an employee from overseas is working in the UK.
Contact British American Tax
To learn more about the common misconceptions about the UK taxation of expats, contact British American Tax today and consult with an expert tax advisor who can answer any questions you might have about taking a pro-active approach to your tax planning.
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