Tax free earnings abroad
 

Chatting tonight with an old friend who works/lives abroad regarding tax-free earnings, which he qualifies for.

Why do military personnel not qualify on overseas postings?

Because they would then have to comply with the host nation taxation and social security systems.

Better the devil you know if you are only going to be there for a few years.

So can I infer that it is possible and legal, just a lot of hassle?

Looking at the US as an example I would have a tax rate of 25% maximum (average would be 17%) vs the UK rate of 25% +40% on a large chunk of additional earnings? I would assume there is no requirement for social security payments?

This doesnt seem a bad deal at all

https://www.google.co.uk/amp/s/www.b...kets.aspx/amp/

Military personnel who are stationed abroad are subject to an inter governmental agreement called a Status of Forces Agreement which regulates all sorts of things concerning having armed people in the country. If it were not for the SOFA they could be regarded as being in possession of illegal weapons etc.

The admin, tax and discipline side of things are also covered, all in all you are better off with the advantages of the SOFA than you would be without it. Not that the soldier/sailor/airman has any choice in the matter.

Been there, tried that, and got the NO! Many years (3 decades) ago I tried it on a tax return (from Germany) and got a very nice letter from the then Income Tax man explaining that, as a member of HM Armed Forces, I was deemed to be employed in the UK regardless of where I was working and length of time abroad.
:cool:.

You wait until they send you the health insurance estimates.

HG, your basic tax rate is 20%.

In addition to your 'tax free' status you would probably lose a lot of allowances and benefits such as LOA as you be a resident. Accommodation charged at local rates.

Don't worry, the beannies aren't stupid.

If you're not paying National Insurance, your UK state pension could be impacted too.

Do the UK Merchant Navy (RFA) still get tax-free earnings? Even when not on active ops?

Things may have changed since I was in, but when abroad we would be entitled to a number of tax free advantages - cars & booze to name a couple.

Plus the fact that you don't have to wear sunglasses all the time you are in the UK.

Those are all location based and not tax status based. I dont see how these could be touched or affected.

Pure speculation and conjecture. If you want the benefit of nonresidential status then it is a fair assumption that you are not 'overseas from UK' but resident there.

A valid comparison might be Loan Service Ts and Cs where you are paid and taxed (or not) by the State to which you are loaned.

As said above if you are overseas on military service you are protected from local tax AND local laws to some extent

If you were on attachment in Saudi Arabia the tax situation would be attractive but the local laws...................... visa, resident permit, driving licence are requiered everwyehere - and when it comes to alcohol, reading material, mixing with other sexes etc etc you are in a minefield - and you are on your own

Unfortunately the UK hasn't a major military presence in either Monte Carlo or the Brit, Virgin Islands - everywhere else that is low tax is a risky spot for anyone on their own without massive support/protection (and I'd include the USA )

Back in the 1980s the on-site contractors based at sites like Mount Alice were there for extended periods and were paid tax free.

Mind you, they drank the equivalent over the bar in whisky every night. Got the DTs if we ran out - they actually laid on a medical chopper flight to bring in a resupply on one occasion.

There is specific UK legislation which says that all UK Crown Servants working abroad must be taxed as UK taxpayers so long as they are undertaking UK Govt work. Crown servants includes civil servants, diplomats and military.

Of course there is, can’t have anyone being advantaged by service to the crown 🙄

Unless of course you a civil servant working in Brussels......

Then they are a civil servant working for a co-ordinated organisation, a completely different kettle of fish.

Not undertaking work on behalf of the UK Government then?

That explains a lot.......