Russian Tax Advice
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Russian Tax Advice
OK, here's one for the layman accountants out there:-
Am a UK based pilot but am just looking at a 17on 13off contract based in Moscow. Have now been told that if I spend more than 183 days out of the UK and are based in Russia then, to avoid being penalised under 2 seperate countries tax regimes, I have to pay Russian tax and therefore have a Russian accountant.
True or not???
Anybody got any better ideas???
Am a UK based pilot but am just looking at a 17on 13off contract based in Moscow. Have now been told that if I spend more than 183 days out of the UK and are based in Russia then, to avoid being penalised under 2 seperate countries tax regimes, I have to pay Russian tax and therefore have a Russian accountant.
True or not???
Anybody got any better ideas???
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Hi,
first of all, you have to check if thre's any tax agreement between UK and Russia, but I don't think so.
If you're spending more than 183 days in Russia, this could be interpreted as your first residence, and you'll pay tax in Russia..but I encourage you to analyse all the aspects before taking a decision...you should find some private "Tax office Adviser" in the UK.
rgds
first of all, you have to check if thre's any tax agreement between UK and Russia, but I don't think so.
If you're spending more than 183 days in Russia, this could be interpreted as your first residence, and you'll pay tax in Russia..but I encourage you to analyse all the aspects before taking a decision...you should find some private "Tax office Adviser" in the UK.
rgds
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Hey Jonny
I am russian and i can tell you that you will not "legally" work in Russia (99,9%) - it is very hard to acquire russian permission to work, you will have contract with some off-shore or European company, which is not under Russian legislation.
Russian pilots who are working for off-shore/European company just dont pay taxes at all... but it is not European style, so you can pay your taxes in U.K. probably...
I am russian and i can tell you that you will not "legally" work in Russia (99,9%) - it is very hard to acquire russian permission to work, you will have contract with some off-shore or European company, which is not under Russian legislation.
Russian pilots who are working for off-shore/European company just dont pay taxes at all... but it is not European style, so you can pay your taxes in U.K. probably...
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For the UK taxman it's not as simple as being out of the country for 183 days in one year. Additionally you may only average a maximum of 90 days over three years, prove that your main domicile is elsewhere AND show that you pay tax there.
If the taxman thinks that your domicile is in the UK (phone bills, mortgage, family, car registered here) they will insist upon you paying UK tax in full, even if you pay some tax elsewhere. If that's the situation then they'll deduct what you pay elsewhere (once you can prove you've paid it) from what they think is due in the UK and then demand the balance.
In short it's no longer sufficient to just say you live, work and pay tax elsewhere. Inland Revenue want you to prove that you do all those things and that you don't have a base here.
Once you're through those hoops it seems you've the russian side to deal with which Pushkin is suggesting won't happen. If they don't want your tax money, great. But the Inland Revenue will.
My best advice is that you get professional advice. Whatever you pay it will be worth it because the IR have long memories and in these cash strapped times are becoming more money grabbing than ever.
If the taxman thinks that your domicile is in the UK (phone bills, mortgage, family, car registered here) they will insist upon you paying UK tax in full, even if you pay some tax elsewhere. If that's the situation then they'll deduct what you pay elsewhere (once you can prove you've paid it) from what they think is due in the UK and then demand the balance.
In short it's no longer sufficient to just say you live, work and pay tax elsewhere. Inland Revenue want you to prove that you do all those things and that you don't have a base here.
Once you're through those hoops it seems you've the russian side to deal with which Pushkin is suggesting won't happen. If they don't want your tax money, great. But the Inland Revenue will.
My best advice is that you get professional advice. Whatever you pay it will be worth it because the IR have long memories and in these cash strapped times are becoming more money grabbing than ever.
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Cheers all,
After several hours research I would agree with both Pushkin and Flintstone. Contract is with european company and UK tax applies in full unless you are in UK for less than 93 days. No doubt there are other issues as well.
Interestingly, the UK and Russia have a double taxation treaty which seems to allow just that, both countries taking their share......just more headaches.
Plus thanks to Merlin for the NI point.
Think i'll just move to a hotel, cheaper and easier to get than a mortgage these days.............
After several hours research I would agree with both Pushkin and Flintstone. Contract is with european company and UK tax applies in full unless you are in UK for less than 93 days. No doubt there are other issues as well.
Interestingly, the UK and Russia have a double taxation treaty which seems to allow just that, both countries taking their share......just more headaches.
Plus thanks to Merlin for the NI point.
Think i'll just move to a hotel, cheaper and easier to get than a mortgage these days.............
And it's not days that are counted, it's nights. ie: one night= two days!
Travel days to/from UK used not to be counted, now they are.
In reality it is near impossible to treat UK as home and not pay up.
And then there is the question of the Ł30,000 annual charge for being a non-taxpaying expat. WHAT?
Only one way.......leave UK for good and live in a fair country.
Travel days to/from UK used not to be counted, now they are.
In reality it is near impossible to treat UK as home and not pay up.
And then there is the question of the Ł30,000 annual charge for being a non-taxpaying expat. WHAT?
Only one way.......leave UK for good and live in a fair country.
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JR - I cannot stress strongly enough to sit down for 2 or 3 hours with a top notch tax accountant.
As a qualified accountant (it's just a sideline!) I felt I knew it all. But swallowed my pride, spent Euro 1,500 on proper tax advice from a smart newly-qualifed tax adviser and saved over Euro 40,000 in one year back in 2004. Still saving Euro 5,000-6,000 p.a. from the stuff they set up for me and don't even work in that country anymore(!)
One of my better decisions.
Pity about all the others!
As a qualified accountant (it's just a sideline!) I felt I knew it all. But swallowed my pride, spent Euro 1,500 on proper tax advice from a smart newly-qualifed tax adviser and saved over Euro 40,000 in one year back in 2004. Still saving Euro 5,000-6,000 p.a. from the stuff they set up for me and don't even work in that country anymore(!)
One of my better decisions.
Pity about all the others!
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NI payments?
BUT remember to keep your UK Social Security payments up as self employed
Only bother to do that if you REALLY think that there may be something left in the pot for you when you get to 70, or whenever the Gummint let's you retire. Those payments are already steep, based on your income and likely to get a whole pile more punitive due to Someone's profligacy!!!!!!!
Only bother to do that if you REALLY think that there may be something left in the pot for you when you get to 70, or whenever the Gummint let's you retire. Those payments are already steep, based on your income and likely to get a whole pile more punitive due to Someone's profligacy!!!!!!!
