TAX in HKG
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TAX in HKG
Beware all those seeking employment in HK with Cathy etc.All UK based crew ie LHR,MAN will have to pay Full UK PAYE and full HK tax 16% from Oct.Even those resident outside the UK.( Fallout from the 49ers Court case).So there may be a lot of positions becoming available soon. Poor pay, very high taxes,massive time changes is it all worth it.
Think carefully before applying.
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I am a PPL and know nothing of commercial flying.
I am however au fait with UK / HK taxation and the double taxation agreement which is in place (I lived there for 9 years and hold PR). You pay tax first and foremost in the country where you are resident. If you are resident in HK, you have no obligation to pay UK PAYE. If however you are UK resident and earn money in HK, you will pay your HK tax. The double taxation treaty then allows for this tax paid to be deducted from your UK tax bill.
You are not taxed twice. You are simply taxed at the same level as if you earned the money in the UK.
If you want to avoid this, become non-resident from the UK.
The Wombat
I am however au fait with UK / HK taxation and the double taxation agreement which is in place (I lived there for 9 years and hold PR). You pay tax first and foremost in the country where you are resident. If you are resident in HK, you have no obligation to pay UK PAYE. If however you are UK resident and earn money in HK, you will pay your HK tax. The double taxation treaty then allows for this tax paid to be deducted from your UK tax bill.
You are not taxed twice. You are simply taxed at the same level as if you earned the money in the UK.
If you want to avoid this, become non-resident from the UK.
The Wombat
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HK tax
Hi
I agree but the law has changed.You now have to pay UK paye and HK tax,you may be able to claim back the HK tax but that may take 2 years.
Every thing is up in the air at the moment.The accountants and legal experts are all looking at it.This also applies to non UK residents they will have to pay the UK PAYE tax and claim it back at a later date if they can prove non resident status.This all applies to UK based crew where ever they reside.Crew are already resigning over this and they are UK non residents,many more to follow Im sure!
I agree but the law has changed.You now have to pay UK paye and HK tax,you may be able to claim back the HK tax but that may take 2 years.
Every thing is up in the air at the moment.The accountants and legal experts are all looking at it.This also applies to non UK residents they will have to pay the UK PAYE tax and claim it back at a later date if they can prove non resident status.This all applies to UK based crew where ever they reside.Crew are already resigning over this and they are UK non residents,many more to follow Im sure!
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Taxing the true non resident just because he pops into the country for two days a month to fly his Chinese registered aircraft to asia is a callous act of indefensible greed that can and will financially break people through paying money they don't owe to a cuntry (sic) in which they don't live.
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Fareaster, you either earn your money through the UK or HK system - not both. If it is through the UK system and you are UK resident, HK taxation does not even come into it.
If on the other hand you earn your money through the HK system whilst being UK resident, you pay HK tax and declare this as foreign income on your UK tax return - paying retrospectively to begin with.
The Revenue are well within their rights to ask you to make a payment "on account" for future earnings, but you are equally within your rights to point out to the Revenue that you will already have paid the first X% to a country with whom they have a DTA.
Before you or anyone else make any important decisions on working for a foreign carrier, you might want to speak with a tax advisor.
If on the other hand you earn your money through the HK system whilst being UK resident, you pay HK tax and declare this as foreign income on your UK tax return - paying retrospectively to begin with.
The Revenue are well within their rights to ask you to make a payment "on account" for future earnings, but you are equally within your rights to point out to the Revenue that you will already have paid the first X% to a country with whom they have a DTA.
Before you or anyone else make any important decisions on working for a foreign carrier, you might want to speak with a tax advisor.
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The problem is that UK based pilots paid in HKG, taxed in HKG but living in, for example, Cyprus,Majorca or Thailand are going to be taxed by Gay Gordon at source. This for spending possibly half a day in the UK twice a month to pick up your Chinese registered aircraft.
So, someone who by any measure is a non resident, is licenced, paid and taxed in HKG is also going to be taxed by the UK tax authorities. If this isn't a crime - it effin well should be.
This doesn't cover everyone, there are many that really do live in the UK (goodness knows why) and so they may be genuinely resident.
So, someone who by any measure is a non resident, is licenced, paid and taxed in HKG is also going to be taxed by the UK tax authorities. If this isn't a crime - it effin well should be.
This doesn't cover everyone, there are many that really do live in the UK (goodness knows why) and so they may be genuinely resident.
spud,
I think you are wrong. UK based or resident pay HK tax and paye to make it up to UK tax. National Ins is the new hit but this doesn't apply to non-residents who aren't based in UK but operate through occasionally.
I think you are wrong. UK based or resident pay HK tax and paye to make it up to UK tax. National Ins is the new hit but this doesn't apply to non-residents who aren't based in UK but operate through occasionally.
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Fareaster is writing drivel. UK based crews spending more than 90 days a year in the UK have always been liable to UK tax, but if their company has been based overseas they have not paid National Insurance. The only change, demanded by the Treasury, is that the company collect the tax due rather than leave it to the individual. The individual will be given a tax code and the company will collect the tax according to the tax code.
Those who work for CX in the UK but live outside the UK will also receive a tax code but theirs will be a no-tax code, which means the company will not have to collect any tax from them. In the case of UK domiciled crews, i.e. Uk passport holders, they may have to furnish proof of their overseas address or otherwise prove that they spend less than 90 days a year in the UK. In the case of non-domiciled crews holding foreign passports, a no-tax code will probably be automatic.
Domiciled refers to the country whose passport you hold. Resident refers to where you live. If you live on a boat and spend less than the minimum days in any country, you are not resident anywhere. You are not required to be resident anywhere, but you will still have a domicile.
If CX set up an onshore company, both CX and their crews will become liable for National Insurance. NI will not apply to foreign domiciled crews living overseas, but will apply to UK residents and UK domiciled crews, even those living overseas, although the latter will still pay no tax. If CX were faced with setting up a UK company and paying NI, I suspect they would reduce the manning levels in the UK to a minimum and move crews to other bases. Positioning crews around would be cheaper than NI for CX.
Those who work for CX in the UK but live outside the UK will also receive a tax code but theirs will be a no-tax code, which means the company will not have to collect any tax from them. In the case of UK domiciled crews, i.e. Uk passport holders, they may have to furnish proof of their overseas address or otherwise prove that they spend less than 90 days a year in the UK. In the case of non-domiciled crews holding foreign passports, a no-tax code will probably be automatic.
Domiciled refers to the country whose passport you hold. Resident refers to where you live. If you live on a boat and spend less than the minimum days in any country, you are not resident anywhere. You are not required to be resident anywhere, but you will still have a domicile.
If CX set up an onshore company, both CX and their crews will become liable for National Insurance. NI will not apply to foreign domiciled crews living overseas, but will apply to UK residents and UK domiciled crews, even those living overseas, although the latter will still pay no tax. If CX were faced with setting up a UK company and paying NI, I suspect they would reduce the manning levels in the UK to a minimum and move crews to other bases. Positioning crews around would be cheaper than NI for CX.
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Joe, I shall try to explain myself a little more clearly.
If you are UK domiciled but resident overseas working for an overseas company, you are liable for neither tax nor NI in the UK. So if you carry a UK passport but work for CX in Hong Kong you will be exempt from UK tax and NI.
If you are domiciled in the UK, based in the UK, working for an offshore company, but resident in Estonia, you will pay neither tax nor NI in the UK.
If you are resident in the UK, working for an offshore employer you will pay tax but not NI
If you are domiciled UK, based in the UK, working for a UK based company but living overseas and spending less than 90 days in the UK per annum, you will not be liable to UK tax but will be liable for NI. Your employer will also be liable for NI. (Brown's team have now muddied the waters on the 90 day rule. It used to apply solely to the wage earner. A Tax Commissioner recently decided that the 90 days had to include your family and your home. So the boys working in Saudi on unaccompanied postings could find themselves having an interview with the revenue. I understand an appeal is to be mounted on this issue.)
The key to NI is where your employer is based. The key to tax is where you are resident. As I understand the current plan as it affects CX UK based crews, CX are going to remain offshore so they will not be liable for NI and neither will their employees, even the UK residents. If CX set up a UK based company then both CX and UK based employees will be liable for NI. As long as you are non-resident, you will not be liable for tax.
For the many UK based crews who are not UK domiciled, as long as they are non-resident they will not be liable to UK tax. I am not sure where they will stand on NI, although I suspect that, being non-domiciled, they will be exempt.
I hope you can find the category that applies to you.
As for HK tax, if you pay tax in your country of residence, you will not be liable for HK tax and you will be exempt from the twice yearly payment. This has to be arranged with the HK tax authorities. Alternatively you can continue to pay HK tax and offset it against any overseas liability.
If you are UK domiciled but resident overseas working for an overseas company, you are liable for neither tax nor NI in the UK. So if you carry a UK passport but work for CX in Hong Kong you will be exempt from UK tax and NI.
If you are domiciled in the UK, based in the UK, working for an offshore company, but resident in Estonia, you will pay neither tax nor NI in the UK.
If you are resident in the UK, working for an offshore employer you will pay tax but not NI
If you are domiciled UK, based in the UK, working for a UK based company but living overseas and spending less than 90 days in the UK per annum, you will not be liable to UK tax but will be liable for NI. Your employer will also be liable for NI. (Brown's team have now muddied the waters on the 90 day rule. It used to apply solely to the wage earner. A Tax Commissioner recently decided that the 90 days had to include your family and your home. So the boys working in Saudi on unaccompanied postings could find themselves having an interview with the revenue. I understand an appeal is to be mounted on this issue.)
The key to NI is where your employer is based. The key to tax is where you are resident. As I understand the current plan as it affects CX UK based crews, CX are going to remain offshore so they will not be liable for NI and neither will their employees, even the UK residents. If CX set up a UK based company then both CX and UK based employees will be liable for NI. As long as you are non-resident, you will not be liable for tax.
For the many UK based crews who are not UK domiciled, as long as they are non-resident they will not be liable to UK tax. I am not sure where they will stand on NI, although I suspect that, being non-domiciled, they will be exempt.
I hope you can find the category that applies to you.
As for HK tax, if you pay tax in your country of residence, you will not be liable for HK tax and you will be exempt from the twice yearly payment. This has to be arranged with the HK tax authorities. Alternatively you can continue to pay HK tax and offset it against any overseas liability.
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T & B, if what you say is right, it's reassuringly reasonable. A lot of people have been very concerned that they are going to be banking with two unlinked tax authorities. My concern was for the people that were genuine non residents that might have to pay money they don't owe to a country they don't live in.
Think I'll try not to post during grumpy attacks. I'm afraid that everything I hear about Yookay these days seems to set me off on one.
BTW, the lot doesn't effect me - I just don't like to see others ruined unfairly.
Think I'll try not to post during grumpy attacks. I'm afraid that everything I hear about Yookay these days seems to set me off on one.
BTW, the lot doesn't effect me - I just don't like to see others ruined unfairly.
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Domicile has nothing to do with which passport you hold.
From HM Revenue:
4.1 Domicile is a general law concept. It is not possible to list all the factors that affect your domicile.
4.2 Broadly speaking, you are domiciled in the country where you have your permanent home. Domicile is distinct from nationality or residence. You can only have one domicile at any given time.
From HM Revenue:
4.1 Domicile is a general law concept. It is not possible to list all the factors that affect your domicile.
4.2 Broadly speaking, you are domiciled in the country where you have your permanent home. Domicile is distinct from nationality or residence. You can only have one domicile at any given time.
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All sounds well BUT... FACT is (atleast a KA fact) that ALL UK BASED crews, regardless where you live, passport you hold or colour skin you have are going to pay FULL HKG and UK tax from October 1st... PAYE (Pay As You Earn) and then will have to claim part or all back.....
Wonder if this will be sorted soon...
Wonder if this will be sorted soon...
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while we're on the subject--
i'm already confused--
any one have any suggestions for some honest knowledgeable tax advisors that they could recommend? that is in the UK!
the one i had been using turned out to be a crook.
cheers;
any one have any suggestions for some honest knowledgeable tax advisors that they could recommend? that is in the UK!
the one i had been using turned out to be a crook.
cheers;
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Dragon 501. Many years ago I worked for a UK company on a permanent overseas contract. I was on a no-tax code and therefore did not have tax deducted at source. However, because the company was UK based, I did pay NI. We have crews currently resident in the UK who are paying UK tax but not paying NI because their employer, ie CX, is not a UK company.
A no-tax code will have to be agreed with the Inland Revenue, but can be done quite quickly. If you live overseas and can prove it, you simply write to the tax office dealing with CX affairs, and request a no-tax code. My employer was familiar with the procedure. It may be that CX are entering, for them, uncharted waters and have not yet grasped all the possibilities. There are British Airways crew, based London but living outside of the UK, who are on a no-tax code.
As far as HK tax is concerned; we have North American based crew, for whom withholding tax was introduced some time ago. Some of them applied to the HK tax authorities to have the HK tax liability removed and were granted exemption.
Studi; not sure about your situation in Switzerland. There is no withholding tax applied by the Swiss against CX and therefore I suspect you will still pay HK tax and then ask Swiss authorities for a corresponding reduction. This latter case has been the system operated by UK based and UK resident crews up until now.
Gilhooley; thanks for that definition. My understanding was that you need not be resident anywhere, but had to be domiciled somewhere. For example, if you were living in a boat in the Channel, you would not be resident anywhere, but by the definition given, neither would you be domiciled anywhere. If I were to die on my boat and I had stashed 5 million dollars under my bunk, where would the death duties be paid?
One of the problems, when dealing with taxation, is that there is tax law and tax precedent. If there is a precedent that the taxman does not like, he can change it. Gordon Brown recently decided, following a ruling from a tax commissioner that the 90 day rule in the UK was to become 90 nights. Historically, day of arrival and day of departure did not count, so if you arrived in London on Friday and left on Monday, that was two days. Under the nights rule it will now be three accountable days. If you took Brown to court and won, tax precedent would become tax law.
A no-tax code will have to be agreed with the Inland Revenue, but can be done quite quickly. If you live overseas and can prove it, you simply write to the tax office dealing with CX affairs, and request a no-tax code. My employer was familiar with the procedure. It may be that CX are entering, for them, uncharted waters and have not yet grasped all the possibilities. There are British Airways crew, based London but living outside of the UK, who are on a no-tax code.
As far as HK tax is concerned; we have North American based crew, for whom withholding tax was introduced some time ago. Some of them applied to the HK tax authorities to have the HK tax liability removed and were granted exemption.
Studi; not sure about your situation in Switzerland. There is no withholding tax applied by the Swiss against CX and therefore I suspect you will still pay HK tax and then ask Swiss authorities for a corresponding reduction. This latter case has been the system operated by UK based and UK resident crews up until now.
Gilhooley; thanks for that definition. My understanding was that you need not be resident anywhere, but had to be domiciled somewhere. For example, if you were living in a boat in the Channel, you would not be resident anywhere, but by the definition given, neither would you be domiciled anywhere. If I were to die on my boat and I had stashed 5 million dollars under my bunk, where would the death duties be paid?
One of the problems, when dealing with taxation, is that there is tax law and tax precedent. If there is a precedent that the taxman does not like, he can change it. Gordon Brown recently decided, following a ruling from a tax commissioner that the 90 day rule in the UK was to become 90 nights. Historically, day of arrival and day of departure did not count, so if you arrived in London on Friday and left on Monday, that was two days. Under the nights rule it will now be three accountable days. If you took Brown to court and won, tax precedent would become tax law.
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TNB is out of date. I work for a foreign company and due to grasping Gordon have just been told that I will be liable for PAYE AND the associated NIC! HMRC and company meeting around mid-may so hopefully more information after that.
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Thanks for that Classicdriver. The goalposts seem to be moving by the day. There are definitely CX crews in the UK paying tax but not NI. When the department dealing with NICs was recently contacted they said that NICs only applied if you worked for a UK based company. Even if they wanted NICs, there are currently no procedures in place to effect collection.
However, CX have just issued a briefing paper in which they mention the collection of NICs. If that is the case, CX must be setting up onshore, which means that they will be liable for NICs just like their employees. Unless, of course, the tax people, with whom CX have been in discussion, are introducing a policy that the NIC folk do not yet know about. This latter would not surprise me. The notion of joined up government from this sorry lot exists only in their imagination. If the latter is the case, the ramifications for other operators into the UK are immense. If offshore companies are to be made to pay NICs, then there is a sound economic case for closing the UK base and opening another one in a less onerous jurisdiction.
Such is the desperation of Brown and his satraps to gather in more of our hard earned cash, they are even talking about taxing cabin crew who receive cash allowances in London. They do that in India. So does every offshore business that operates through the UK have to declare the expenses of all who pass through. The Treasury mandarins have clearly taken leave of their senses.
So, for now, confusion reigns.
However, CX have just issued a briefing paper in which they mention the collection of NICs. If that is the case, CX must be setting up onshore, which means that they will be liable for NICs just like their employees. Unless, of course, the tax people, with whom CX have been in discussion, are introducing a policy that the NIC folk do not yet know about. This latter would not surprise me. The notion of joined up government from this sorry lot exists only in their imagination. If the latter is the case, the ramifications for other operators into the UK are immense. If offshore companies are to be made to pay NICs, then there is a sound economic case for closing the UK base and opening another one in a less onerous jurisdiction.
Such is the desperation of Brown and his satraps to gather in more of our hard earned cash, they are even talking about taxing cabin crew who receive cash allowances in London. They do that in India. So does every offshore business that operates through the UK have to declare the expenses of all who pass through. The Treasury mandarins have clearly taken leave of their senses.
So, for now, confusion reigns.
