UK/English Tax Q&A

[Moomoo]

All you need is a p45 or p60 if you have one. It just needs to have your home address and the tax office's address (which should be on the P45 / P60). I came in September last year and  handed in my P45 and I haven't had any problems so far (touch wood). I didnt get the certificate of residence because it'll only cause problems with tax etc when I go back. Hope that helps. 

[DevilMogun]

I've never had a certificate of residency and I've been here 2 years.  I did phone the tax office when I first arrived and they wanted an address in England - ie a residence.  I didn't have one and hadn't lived in the UK for a couple of years so they said I'm not a resident then.  Hard to argue with that really.  I told my school, thinking that it would mean my 2 year tax free period would be affected but they said 'nahh 'ts ok'.  I got my 2 years tax free, I now pay Korean tax and I have no idea what my position would be if I went back to the UK, but as I don't plan to I don't really care.

I'd still be interested to know what it's all about though and what happens to you Brits who are trying to get the certificate.

[Eros]

I had an accountant back in England and suffice to say the tax position is a minefield. There is a common misconception that if we have  a residency certificate we are exempt from taxes in Korea and in England. That is not true. If you are earning an income, you should be paying taxes to someone somewhere. The double taxation treaties in effect are there to ensure that you don't get taxed in England and in Korea. Not that you don't get taxed in any.

As I say there are a plethora of rules and you will have to research it yourself. It is true though that if you do not pay taxes in Korea, you will have to pay taxes on your Korean income at the UK rate. If however you leave the UK indefinately (for a few tax years) and have no ties to the UK (Income, housing etc) then you can pay taxes in Korea only. You should file a P85 I think with the tax office back in the UK. There are no hard and fast rules, each case depends on its own facts. The information is readily available from the tax office website. So have a browse.

[tbhscot]

i got my parents to contact the tax office back home about this and they said that because i wasn't contacting them in myself they could only send me a letter confirming my national insurance number. it obviously had my home british address on it. i submitted that with some application form and everything was fine.

[auster]

I filled in a P85, sent that to my tax office. They gave me a double taxation relief form but didn't explain who I give this to. As for the cert of residency, I applied for one in early Feb, still no sign, which really f#$ked thing up for me out here in Korea. My school ask for it every week, but still no sign. Wish they could've said just take your last p45, pay the lower tax here, make sure you fill out the double taxation relief form to avoid paying UK tax on your return and that'll be it.

HMRC are peerless f#$cking incompetents.

[gangwon]

I sent off my P85 before leaving England which entitled me to a tax refund as I wasn't completing a full tax year in the country and applied for proof of residency at the same time. For proof of residency I just sent them a letter asking for one with my address and NI number and they sent me a letter about 3 months later. It then got lost in the post coming from the UK to here and I eventually gave it to the school after about 6 months. The school didn't tax me during that period.

I have no idea what will happen when i get back after 2 years here, but surly HMRC have no way of knowing how much I earned over here, so how can they tax me, (unless i tell them the truth!)

As fo paying the 3% tax here, have a search around Waygook, the tax went up a lot last year. You're now taxed on extras like housing, flights, settlement etc plus about 15% after threshold. Lots of people were paying around 2 mil lump sum last year.

Charlie

[fudoose]

dont bother with the embassy, waste of time, look its really simple, write a letter to your local tax office, saying your name, address, and that you want proof of residency.. about 6 weeks later they will send a really shit looking handwritten letter with a signature saying " your name, lives at that adress.. you gotta love the efficiency. It's a giant ball-ache but will prob save you 400 quid over a year, which ain't much.. but..

[ajw]

The rudest customer service I've experienced in my whole time in Korea was at our Embassy in Seoul - a total disgrace. Totally mitigated the joy and (sort of) being back on British soil!

[willinkorea]

It took over 6 months to get my Certificate of Residency from the HMRC - which, as pointed-out earlier, looks only marginally more official official than something one of my 6th graders could have cobbled together...

The deal is that, yes, you need to pay tax in one of either Korea or Britain. Getting the tax residency certificate means you're not ordinarily resident in the UK, and so not liable to UK tax, only Korean tax. This is much lower than in the UK, so worth ensuring you're eligible for. As a bonus, Brits (and some other citizens) employed within the state school system (ie with EPIK or GEPIK) enjoy a two year tax free period here if they can prove residency within Korea for tax purposes. So, all round, worth pursuing, despite the significant hassle.

[Suza]

Thanks for your reply!

I am British. I worked here from October 2008 - 2010 and it was indeed a tax free haven.

Now, I'm come back they say it changed in 2010 December. I don't believe it at all!

Are you sure that you simply no longer qualify for tax-exemption?  Since you have worked in Korea for two years (in a tax-exempt situation) then technically your two-years-of-tax-free-status has expired.

No, because I took a 5 month break and went home and travelling. I only came back again in March - so the year begins new.I'll call the NTS help line later.

It doesn't matter when it was, you're only eligible for a tax exemption for your first two years in Korea - not two years in total.  Even if you paid tax in your first two years, you'd still have to pay tax if you've been here longer than that.

I'm sure that it begins anew. I had to get a new visa etc. Anyway, theres no point in all this speculating. I'll phone the NTS later. I'll report back what they say incase anyone else is having the same troubles,
http://www.nts.go.kr/eng/help/help_01.asp?top_code=H001&sub_code=HS01&ssub_code=HSA1

[Incredagogue]

I don't know if this is too far down for anyone to notice/care anymore but here goes:

I was having a hell of a time getting a straight answer on my taxes. Teachers, office admin, even the NTS hotline gave me confusing and varying answers. I ended up visiting a tax office in person (the Gangnam-gu one to be specific). They had the entire basement set up to assist with tax filings. I literally sat there while a Korean went through the whole process for me. It was very quick (15 minutes) and now I have no worries about having made a mistake, or not filed correctly.

Hope this helps!

[ame]

Anyway, theres no point in all this speculating.

You started it.

Anyway, my contract (EPIK) states in article 13.5 that  "If the Employee has already worked more than two years in Korea, he/she shall not be eligible for tax exemption."

Seems pretty clear to me.

[Suza]

Not all teachers are on the same contracts. I work for Gunpo which doesn't fall under GEPIK or EPIK.

My coteacher was also surprised at the recent change and she knew nothing about it until the admin office mentioned it to her today. She has worked with native teachers for 5 years.

My friends who work for GEPIK (and less than 2 years) have also not heard anything about the tax changes as of December 2010.

The admin office initially wanted to take a lump sum out at the end of my contract. This lump sum would be somewhere in the region of 2 million.

The admin office has not once mentioned my prior 2 year employment in Korea - with a 5 month break out of the country (not on any contract).

The point of my OP was not to question my 2 year prior contract and my eligibility for tax exemption it was to ask fellow teachers whether they have noticed any tax deductions since last December.

[Darkeru]

Do any of my fellow Brits know the tax situation when we return home, without spending a whole tax year (April - April) in Korea?

[Klogical]

what dyu mean?

gettin back pension etc
having to pay uk people tax?
or what people in uk are currently gettin taxed?

if its pension i dunno pal, as far as i understand koreans are required to pay national insurance in the uk and they get naff all back, consequently we dont get any of those pensions contributions back

if its about payin the inland rev. i'd keep quiet lol - ive not read anywhere of them asking you to pay ,, nor anyone payin lol

as far as uk ta sitch is concerned we are bafoooxed mate.. a lot  of the new regime kicked in in may and inflations quite high (compared to what we know)  ... people are feeling the wage pinch right about now

[Darkeru]

Having to pay the UK people tax. I heard that generally people who stay away for a whole tax year are excempt from paying UK taxes on money earned abroad, but I'm not sure how much/what happens/what the process is for people who spend less than that time abroad.

[Katherine84]

Hi,
If you haven't spent April - April away from the UK then you are still classed as a 'resident' and as such you should pay full tax on your earnings to the Inland Revenue ( I checked this out with them). However, I've never heard of anyone who's actually had to do it, so if you keep quiet you should be fine! Just don't go shouting to them about what you earned this year!

[Klogical]

what process?

only one i can think of is self assessment....

what would you do if you brought nothing back and spent all your cash here?

they dont know anything - its not like gunna nz or oz and gettin an inland rev cert before you go..

id just keep quiet ive not read or seen a dingle about giving them a penny... im pretty certain your not required to pay anything - and if you are what you bring back will be well under the radar.....

what you mite get if you do start payin tax is a letter sayin u are behind on NI payments asking you to make a voluntary payment to top it up (bo**ox to that)......

[Klogical]

Hi,
If you haven't spent April - April away from the UK then you are still classed as a 'resident' and as such you should pay full tax on your earnings to the Inland Revenue ( I checked this out with them). However, I've never heard of anyone who's actually had to do it, so if you keep quiet you should be fine! Just don't go shouting to them about what you earned this year!

listen to katherine84 lol

[Darkeru]

Sounds like Katherine is the one to listen to - what I'm worried about though is I already sent a form a while back saying what I was doing abroad, since I was planning to (and still might be) staying two years.