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Where Taxpayers and Advisers Meet

Moving To China, Will I Be Liable For UK Income Tax ??

Marv_S
Posts:3
Joined:Wed Aug 06, 2008 3:49 pm

Postby Marv_S » Sat Feb 03, 2007 7:04 pm

Hi

I am looking to move to China in the near future to do mostly exporting and maybe some sales (sending from China to the UK).

I would prefer to stay there 9 months out of a year and maybe 3 months back in England. Staying there for a whole year is also an option.

I would prefer to carry on using my uk bank and paypal account maybe even my ebay account too. My question is am I still liable for UK Income Tax if my business and bank account are still uk based but I am living and sending items from overseas ?.

Thanks,
Marv

Owen & Co
Posts:24
Joined:Wed Aug 06, 2008 3:44 pm

Postby Owen & Co » Sun Feb 04, 2007 5:27 am

The tax consequences of this arrangement depend on several factors. If your trips back to the UK while you are away average 91 days or more, then you will still remain UK resident and will be taxable in the UK on your worldwide income, independent of what bank accounts etc you use for your business.

There is an exemption for UK resident who go abroad to take up full employment for more than a complete tax year. Broadly speaking, this exemption means that you would not get taxed on your foreign employment income in the UK. However, it sounds like you will be self-employed while you are away.

It must be remembered that double tax relief may be available to you on your foreign earnings so that you do not pay tax twice on your profits ie at the full UK rate and the full Chinese rate.

Regards

charteredtaxadviser@yahoo.co.uk

tax me less!
Posts:983
Joined:Wed Aug 06, 2008 3:29 pm

Postby tax me less! » Sun Feb 04, 2007 9:36 am

I do not agree with Owen & friends. You will be carrying out a business partly in the UK therefore the entire profit will be taxable here.

You will have read that China (last week) introduced a new tax return form. You will need to pay tax in both places as well as review your VAT accounting. Take profesional advice.

Marv_S
Posts:3
Joined:Wed Aug 06, 2008 3:49 pm

Postby Marv_S » Sun Feb 04, 2007 9:52 am

The way I see it is that I will be in China and they'll get there income tax accordingly because I'm living there. If I'm not in the UK how can they expect money from me ??. I'll be out of the country over the 183 days (and not back for 91 days) so they'll not be getting a penny from me!.

From what you have said I will be making basically nothing after paying all these taxes and dont see the point in even going if what you say is true.

I buy goods wholesale from China off a few businesses so what taxes are they paying as they are making there money from UK sellers??

I will be doing exacttly the same thing and im damn sure they wont be paying the UK and taxes whatsoever.

Owen & Co
Posts:24
Joined:Wed Aug 06, 2008 3:44 pm

Postby Owen & Co » Sun Feb 04, 2007 12:05 pm

Depending on your visits back to the UK etc, it is possible that you will pay tax in both countries but if this is the case the likelihood is that there will be double tax relief available so that you will not effectively be paying tax twice.

Fortunately, it doesn't follow that because the business may be partially carried out in the UK the entire profit will be taxable in the UK.

I'm assuming you will not be trading through a company? This could have an effect.

Hope this helps

charteredtaxadviser@yahoo.co.uk

Marv_S
Posts:3
Joined:Wed Aug 06, 2008 3:49 pm

Postby Marv_S » Sun Feb 04, 2007 12:33 pm

Hi

This is pretty confusing stuff to say the least.

I'm not not sure what you mean by 'the business may be partially carried out in the UK'. The only business I'll be doing will be in China if I come back to England it'll just be to visit family.

If I were to send goods to customers in say America am I liable to pax tax there also ??

Bob Jones
Posts:268
Joined:Wed Aug 06, 2008 3:43 pm

Postby Bob Jones » Sun Feb 04, 2007 12:41 pm

There is a general principle that governments want to tax the income of its residents no matter where in the world the income arises and they also want to tax the income that arises in their country no matter where in the world the person lives. This applies to all governments which is whay they have to get their heads together becuase of the problems of double taxation - seek professional advice.

Bob


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