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Fyrey
May 12th, 2004, 23:38
Hi all, been a bit of discussion on the 'How did you get out of paying your medical form fee...???' thread about the UK tax situation.

http://www.ithinkimlost.com/modules.php?name=Forums&file=viewtopic&t=77

Lots of conjecture and speculation, but does anyone really know what the deal is?

Main points are:

How much tax can one expect to pay in the UK after 1 year on JET?

How long does one have to be away from the country to escape Tax? and are the stories true about the April to April tax exile?

Can I really come back to the UK for 2 months tax free?

Any definite answers to the above would be very appreciated.

Thanks!

richuk
May 13th, 2004, 01:25
Right, the best thing to do would be to approach the inland revenue, as only they can really tell us the facts.....however......

If we have to pay UK tax and NI then that is effectively a THIRD of our salary - at present I have 22% of my montly salary deducted as income tax and 11% as NI. If we were expected to pay that proportion of our Jet salary to the taxman on our return, the whole excercise would be financially futile. We would be saving to clear a tax bill!!! The bill would be like a million yen!

I reckon if you do 2 years you're fine. I'm just going to vanish and the f*&@£rs will have to come and find me if they want my money....

After all of this, the Student Loan Company are going to have their grubby mits in our pockets as well, surely....???

R

Greggar
May 13th, 2004, 01:33
I know its probably way different, but here in the states the rule is the first 80k USD you make each year abroad isn't taxed. Besides, we'll be paying Japanese tax on anyway, can't imagine you being taxed twice.

Fyrey
May 13th, 2004, 02:01
Besides, we'll be paying Japanese tax on anyway, can't imagine you being taxed twice.

As far as I'm aware, and again, this is hearsay, but good hearsay, we don't pay Japanese tax until the third of JET. And I could well imagine being taxed twice.

Greggar, have a look at the thread i link to in my first post.

Shotokai
May 13th, 2004, 17:30
i was under the impression that we dodged it if we stayed more then 1 year. but the bonus of it would be, that our e111 forms would be valid as that uses the NHS funds so to pay tax for it would be worthwhile, esp. as the jet insurance doesn't cover everything.

richardp
May 13th, 2004, 18:02
Ok, this is my understanding of how things work.

If you stay for a year and then come back to the uk, then you are supposed to pay income tax and national insurance on your earnings. You can get around this though by travelling between the end of July and January. It's better to spend your money traveling than to give it to the tax man after all.

If you stay two years you don't pay tax to anybody

If you stay three years, you pay japanese income tax, which is 10%ish IIRC. But you only pay tax on your third year earnings, the first two years earnings stay tax free.

The situation with student loans is if you've just left uni you don't have to pay anything for a year, after this you can inform the slc that you are working abroad and defer your payments.

richuk
May 13th, 2004, 23:40
I've pasted some stuff from the inland revenue website. The address is:

http://www.inlandrevenue.gov.uk/international/treaties2.htm

Basically, it looks like they're pushing to introduce this DCA system between the UK and Japan this year. If the 'home country' is the [i]employees (i.e.us) country, not the employers, then we can all kiss good bye to a third of our salaries!! Surely this can't be true, but it isn't clear, read for yourselves.........

Double Contribution Agreements

Double Contribution Agreements (DCAs) promote the free movement of labour and assist in maintaining the UK's position as an attractive inward investment location. Among other things, DCAs provide that, where a worker is sent on detachment from one country to the other, he and his employer are liable to contribute only to the 'home' country's scheme - thus eliminating the liability to contribute simultaneously to the social security schemes of both countries. At the moment the UK has 2 DCAs with the possibility of others to follow.

The UK also has 14 bilateral social security agreements in force which include such contribution provisions which broadly speaking eliminate the liability to contribute simultaneously to the social security schemes of both countries. In addition, within the European Economic Area, EU regulations ensure that workers posted to or from the UK are protected from simultaneous liability for contributions in both countries.

List of UK's social security agreements with contribution provisions (with Statutory Numbers):


Double Contribution Agreements

The main priorities for the coming year are to bring the Japanese and Korean agreements into effect and to proceed to signature of a new agreement with Slovakia. We also hope to make progress on agreements under negotiation with Poland and Chile.




[/b]

joe
May 13th, 2004, 23:50
surely the Double Contribution Agreement only applies when you start paying Japanese tax, which isnt til you've been there 3 years. As long as we're not paying japanese tax the DCA is irrelevant.
confusing isnt it..
Joe

richuk
May 14th, 2004, 00:14
Just called the Inland revenue, and they told me that we will all be liable to UK income tax etc whilst in Japan from July 2004 to April 2005 as we won't cover a full tax year. This makes no sense however, as people on BD on saying they're left with over a grand a month in hand.

I'm don't care anymore. Thinking this much about money is boring.........and very confusing!

indigovapour
August 12th, 2004, 02:22
Does anyone in Japan (CLAIT? The Finance Ministry?) inform the Inland Revenue what we've been doing, i.e. earning money? I told the InlandRevenue I was off to South East Asia to bum around and live off my savings for a year... they said no problem, fill in this form, and then fill in another one when I get back to declare any earnings. Of course, I will definitely declare all my JET money, no question!! I was just wondering... if I forgot, would anyone in Japan help out by telling them for me, hmmm? :roll:

solacegirl
August 12th, 2004, 11:21
I know Tax stuff is dull as ditchwater. The lowdown I got at orientation in London was this:

1.Basically if you do just 1 year on Jet and come back to the UK, you will pay a lump sum to the taxman on your arrival back in the UK. There is no two ways about it.

2.If you do 2 years and come back to the UK, you won`t pay tax.

3.If however you do 1 year on Jet (starting July 2004 -July 2005) and work/travel outside of the UK until April 2006, you won`t pay tax. n.b This final point is not quoted from the Inland Revenue, only based on my assumption from living abroad for more than a full taxable year (i.e April 2005-April 2006.) If you want textbook, phone the Gayland Revenue!

Fyrey
August 12th, 2004, 11:41
you will pay a lump sum to the taxman on your arrival back in the UK. There is no two ways about it.

Do you know how much that lump sum would be?

Additionally, while you can evade the tax by staying out of the UK until the following April, you are allowed to take a holiday to the UK for no more than 60 days, not including the days you were travelling. So that gives you at most 2 months at home. However, if you exceed those 60 days, you will be liable for tax.

solacegirl
August 12th, 2004, 11:58
I remember them telling us at London orientation that it would be over a grand (sterling). Again this is mere speculation. To get a precise figure, ring the IR or better still, the Jet desk in London (although they could divert you back to the IR) A good idea would be to hunt down an ex-JET from the UK.

Oh BTW, if you think your cockroaches are bad -watch Stephen King`s "Creepshow", and I guarantee you`ll be feeling a whooole lot better about your infestation!
Seriously though, I would get a new pad if I was you!

Laura
August 12th, 2004, 13:02
hey, quick post from me,

but yeah, i rang the inland revenue before i left and there were some forms we were supposed to fill in about leaving the country. it doesnt really matter if you:ve never had a job before, like me though!

umm yeah, the lump sum is about 2,800 pounds and you can pay it in one lump sum or spread across several months after you get back. either way, i think the inland revenue will know.

so if you want to get out of it, stay out of the country until april 2006. it:s a damn shame jet doesnt cover this amount.

laura
(cant work out caps on this keyboard!)

Chris
August 13th, 2004, 09:22
I think the way they'll get you is through your pension scheme refund. THey'll be informed when that comes and then questions will start being asked.
I think the refund amount and the tax bill are similar amounts.

Also (and this may just be for my BOE so don't shoot me for saying this) in my third year although i will pay Japanese tax, my BOE will just pay me more so that i'm still on 300,000 Yen per month net.
The whole tax thing was pissing me off but i'm 80% sure i'll stay on for a second year so doesn't matter too much......

Charlotte
August 17th, 2004, 12:15
Very fustrating.
Basically as I understand it stay for a year and you have to pay tax. Stay for 2 years and you dont.

JayDubya
August 17th, 2004, 14:01
Someone told me that every year you stay on JET gets cheaper in terms of taxes and stuff, and you have more money to keep.

will
August 17th, 2004, 14:18
ok this tax thing.
i looked at www.inlandrevenue.gov.uk/rates, and came up with the following calculations

we are liable to pay uk tax if we go back in july
4745 is tax free
2020 is taxed at 10percent
the remaining 6735 is taxed at 22 percent

total tax payable is 1685 or about 335k yen or just over a months salary.

on top of this we may pay national insurance, but since we are paying Japanese pension contributions, i doubt it. our nice bosses even give us this money back, as written in the contract, when we leave Japan.

ie 36498yen a month in a lump sum (about 2215 gbp)

next, student loans: we will be earning more than the starting threshold of 10k, so we need to make a lump sum repayment on return. the website says

Working abroad for a foreign employer
If you are working abroad for a foreign employer - and your income is above the starting limit of £10,000 a year - you will still need to make loan repayments. Each year you will have to pay back the same amount as if you had a job in the UK but your method of repayment will be different because you have no UK-based employer.

Each year you need to tell the SLC your total income. They will then calculate the amount due so that you can make payment direct to the SLC. You will only be able to pay in pounds sterling from a UK bank account. The SLC will send you more information after you have told them you have gone abroad.[/quote]

you can contact student loans at

Student Loans Company Limited
100 Bothwell Street
Glasgow
G2 7JD


(tel: +44 0800 40 50 10 / fax: +44 141 306 2005)
writing makes everything official i think
plus, if you just graduated, then you make no payments until april of the following tax year. you will then be liable to 60gbp a month repayments, so a total of 180 on return.

will
August 17th, 2004, 14:20
so its swings and roundabouts!

adammoogle
August 17th, 2004, 22:42
good info will, cheers! i knew it all already but its nice to read it in a nice simple form.

basically its best to stay at least two years money wise...but theres so many other reasons to stay or leave i wouldn't worry about it, the pension covers the tax so you won't b out of pocket...

with regards to the student loans company though, they are bastards and making me pay monthly (about £70 a month i think) even though i said the money transfer costs would make that unfair and unworkable, stupid dumb shit god damn motherfuckers! i'd say don't tell them your leaving the country and let them find you, there run by a private company now and its all about the money, i hate labour :evil:

Charlotte
August 18th, 2004, 13:22
Didnt even consider the whole student loan thing. Just buggered off out the country without telling either the evil tax man or the student loan people. Hey worry bout it later :D

Ini
August 27th, 2004, 15:05
I like your style, the tax man and the SLC are just a few members of a not very exclusive group of people who I owe money to. I fled the country without telling anybody and if they want some money they will have to come here and prise it from my cold dead hand.

nicklad
August 27th, 2004, 15:23
If the inland revenue want some cash then they can just blooming well go and and become a prostitute.

Their not getting anything off me. 20-30% of my wage, fuck that.
Cayman Islands after my time here me thinks.

547
August 30th, 2004, 15:34
possibly something even more boring- you can opt to pay NI contributions, 390 pounds a year garantees you the government pension when you retire. I am still thinking about this, as i'm not sure there will still be government pensions around then...

Fyrey
August 31st, 2004, 09:28
...and if they want some money they will have to come here and prise it from my cold dead hand.

From under the piping hot Seven-Eleven Burrito and the bottle of JD?

On topic, thanks Will for posting up a detailed explanation about what I was originally too lazy to work out - additionally hope things are working out in Kunamoto for a fellow Sheffielder.