I've currently changed to contracting for a UK based company that I used to work full time for before. Due to the nature of my work I can work from anywhere with an internet connection so I am planning and indeed practicing being out of the UK for over 9 months of the year (changing country every couple of months or so) to claim non-residency and tax free status.
However I currently only have a UK bank account and if I have my money is paid into this I believe it will be liable for tax? I'm desperately trying to find out how to quickly open an offshore account but all the information I have googled for and read hasn't really been that helpful.
Also initially I don't have a large sum of money to deposit although I could get a loan but really I would rather not. I'm not a big financial institution (We are talking about ~Â£74k a year) so lots of the options I have seen don't suit me.
There must be some people out there in a similar situation that have found a workable solution?Other
There's a few things to respond to here. And I must stress that I am not an accountant, just someone who has been through some of this and can comment from experience!
- If you are liable for tax in the UK, you will have to pay it whether your account is in the UK or offshore. The only difference is that if your money is paid into an offshore account it's up to you to declare it..if it's paid into an onshore account it's up to you to prove to the tax folk that you're not liable for UK tax.
- You should be aware that there is a paper called the European Tax Directive which means that if you are not resident in the UK, but you are resident in/travelling around Europe - then you will not be able to run an offshore bank account (at least not in Jersey or Guernsey) without having some tax withheld - as part of the setup of the acct you have to demonstrate residency/tax status. (For example - I am an Aussie, so I CAN set up an offshore acct without having tax withheld.)
- You should also be aware that the tax office - or certainly the VAT part of it has quite strict (and surprising in my opinion) rules about contractors and the definition of where they provide their service. For example, as an author selling the rights to a publisher in the UK, I am deemed to be providing my service in the UK by the VAT people, even if I am not resident there when I write the book and I know that there are similar rulings that affect contractors who are overseas based but working in the UK temporarily. I stress that my knowledge only extends to VAT on this one as I have yet to have to deal with it at an income tax level.
- If you get through all this - you might like to have a look at my website - in particular the articles section which talks about how to set up accounts, compares accounts, lists the top ones etc. The web address is [url]www.offshore-savings-accounts.org.uk[/url] offshore banking