Working In Thailand

[Catpian Slackbladder]

As per my previous post, next week I will be moving to Thailand on a 2 year working contract. I have heard that I may have to pay tax in the UK on my earnings??

I may have misheard/misunderstood what was said and don't seem to find anything useful on HM Treasury website.

Is there any truth in this?

[GuestHouse]

You have to be out of the country for one full tax year before you are elligable for full tax free status.

In truth a tax balance is done, but I'll come to that later.

So if you leave May 2006 your UK tax free clock starts ticking on April 5th 2007 and you complete your full tax year on April 4th 2008.

Between now and April 5th 2006 your tax liability is calculated on the basis of.

Normal UK Calculation of tax based on Total earnings (in UK and in Thailand) but subtracting taxes you paid (and can prove you paid) in Thailand.

After April 4th 2008 your tax liability for overseas income is Zero, but you still pay tax and have tax allowances based on any income in the UK (intrest on savings etc).

Some things to watch out for:

You cannot pay into a UK pension once you are tax free

You cannot start any more ISAs once you are tax free

Pay your National Insruance (Class 3) in order to maintain pension and welfare rights

Then watch out for this baby.....

You are in theory only subjected to Thai tax if you spend a total of 182 days in Thailand in anyone year. This year you will break 182 days, but you may not on the year your contract ends.

So be careful not to hang around for a few extra weeks at the end of your contract and then get lumbered with tax for almost six months of wages.

[Thaipwriter]

You have to be out of the country for one full tax year before you are elligable for full tax free status.

In truth a tax balance is done, but I'll come to that later.

So if you leave May 2006 your UK tax free clock starts ticking on April 5th 2007 and you complete your full tax year on April 4th 2008.

Between now and April 5th 2006 your tax liability is calculated on the basis of.

Normal UK Calculation of tax based on Total earnings (in UK and in Thailand) but subtracting taxes you paid (and can prove you paid) in Thailand.

After April 4th 2008 your tax liability for overseas income is Zero, but you still pay tax and have tax allowances based on any income in the UK (intrest on savings etc).

Some things to watch out for:

You cannot pay into a UK pension once you are tax free

You cannot start any more ISAs once you are tax free

Pay your National Insruance (Class 3) in order to maintain pension and welfare rights

Then watch out for this baby.....

You are in theory only subjected to Thai tax if you spend a total of 182 days in Thailand in anyone year. This year you will break 182 days, but you may not on the year your contract ends.

So be careful not to hang around for a few extra weeks at the end of your contract and then get lumbered with tax for almost six months of wages.

great info here, cheers!

[Catpian Slackbladder]

You have to be out of the country for one full tax year before you are elligable for full tax free status.

In truth a tax balance is done, but I'll come to that later.

So if you leave May 2006 your UK tax free clock starts ticking on April 5th 2007 and you complete your full tax year on April 4th 2008.

Between now and April 5th 2006 your tax liability is calculated on the basis of.

Normal UK Calculation of tax based on Total earnings (in UK and in Thailand) but subtracting taxes you paid (and can prove you paid) in Thailand.

After April 4th 2008 your tax liability for overseas income is Zero, but you still pay tax and have tax allowances based on any income in the UK (intrest on savings etc).

Some things to watch out for:

You cannot pay into a UK pension once you are tax free

You cannot start any more ISAs once you are tax free

Pay your National Insruance (Class 3) in order to maintain pension and welfare rights

Then watch out for this baby.....

You are in theory only subjected to Thai tax if you spend a total of 182 days in Thailand in anyone year. This year you will break 182 days, but you may not on the year your contract ends.

So be careful not to hang around for a few extra weeks at the end of your contract and then get lumbered with tax for almost six months of wages.

Let me get this right in my head then, as I am a self acclaimed dunce at anything tax related!

In my first year I will be subject to Thai and UK taxation?

In the second year I will be tax free as long as i spend 182 days or less in Thailand?

So, having no UK income and a Thai income of around 100,000 baht a month, what am I likely to have left to live on?

And

Is there anyway around paying as little tax as possible?

[wasabi]

100,000 baht a month sounds ###### good, what job is this?

[kudroz]

As per my previous post, next week I will be moving to Thailand on a 2 year working contract. I have heard that I may have to pay tax in the UK on my earnings??

I may have misheard/misunderstood what was said and don't seem to find anything useful on HM Treasury website.

Is there any truth in this?

I suppose you will be employed by a Thai company. Then if you are, you will automatically pay taxes in Thailand (it will be witheld from your pay check).

You will also be liable to pay taxes in the UK. Although, you will get a tax credit for the taxes you have already paid in Thailand.

http://www.rd.go.th/publish/770.0.html

Edited May 17, 2006 by kudroz

[GuestHouse]

I suppose you will be employed by a Thai company. Then if you are, you will automatically pay taxes in Thailand (it will be witheld from your pay check).

The tax reconcilliation is made at the end of the year. But specifically answering the question.

Until you attain UK Tax Free Status you have a UK tax liability that is calculated as

Total Earnings - Taxes at UK Rate

If you haven't paid as much tax as you would in the UK, you owe the rest to the UK tax man. How he gets his hands on it is another matter.

100,000 baht a month sounds ###### good, what job is this?

As has been said many times, Bht100K is not a lot of money and is well below the full expat deal.