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Monday, August 13, 2007

How does paying tax work if I earn money abroad? -

I live in the UK and was wondering if I went travelling and worked abroad in america or australia for the summer what happens when it comes to paying taxes? Do I pay them to my country or the country I make money in?________The UK tax year goes from 6th April to 5th April. Your tax position would depend on what dates you are out of the UK. It seems you won t be out for a whole tax year if you are only going for the summer. If that is the case, you don t have to do a form P85 when you leave and a form P86 when you come back in, and you can t claim a repayment when you go if you will be back within the tax year. But you will have to register for an UK Tax Return to be sent the following April, with employment page(s) and a foreign income page in addition to the basic Return. I can t tell you about the tax laws in other countries, but on your foreign income page of UK Tax Return you can claim credit for any foreign tax deducted, and of course declare any earnings. You will then be sent a computation, and be advised if there is any further tax to pay. If you are only abroad for the summer, you will retain your UK residency.________Depending on he economic situation in the foreign country, you may have to pay taxes on money earned there. Just tell them to mail you an income tax form for non residents. It depends on how much you make there, where you reside during the income, what your citizenship is during the income, and how long you reside where you reside during income. Dont forget to get the appropriate form for foreign income in your citizenship country too. Talk to a tax expert from your citizenship country (usually an accountant) if it gets too complicated or you want to maximize your savings.________It depends on whether the UK has a double taxation agreement with the country you re working in, and how long you stay there. With Australia and the US, if you re there for a few months, you pay tax there on your local earnings and in the UK on anything else. If you stay for a year, you start getting taxed like the locals.________You pay the country you make the money in. so if you work in Australia, you pay them tax under their tax system. Usually when you leave these countries, you can claim back the tax you paid as you aren t staying.________For tax purposes you are domiciled in this country and pay tax on moneys earned abroad, unless you are away for a very long time.________I m not sure how to answer your question but I would like to recommend you a company which helped me a lot. I got consultation at no cost for my tax problems. http://freebie4.com/AbsolutelyFreeTaxCon...

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