“Tax Year”

The fiscal year in UK the goes from 6 April to 5 April the following year.

 

Who pays taxes?

If you work less than 183 days in the UK, you can receive your salary tax free, but you will have to pay in your country of residence. If you work and/or stay in England most of the time, you become “Tax Resident” and you have to pay taxes in the UK for that fiscal year.

Taxes in the UK are complex but we will give you general but useful explanations. When you come to work in the
UK, we will give you all the advice you need and put you in contact with companies and accountants who will help you work around the issue.

 

National Insurance Number or NINo.

When a foreigner comes to the UK to work it is vital he gets his NINo. If not it is illegal and you could end up paying incorrect tax. This leads to tax liability in the future and certainly a debt. You will probably pay a fine. You will need to get your NINo within 30 days or before starting work in the UK. We will help you on how to do this.

 

Personal Allowance.

Each fiscal year there is a “Personal Allowance”. This is the money you can earn without having to pay tax. If you win more than that amount, you will pay tax only on the amount exceeding the personal allowance. However, the personal allowance is progressively reduced the more money you earn.

 

To pay your taxes in the UK, you can do it:

• As PAYE (Pay As You Earn). You are Employed to work “Por cuenta ajena” in Spain. You have a payroll number and your employer will pay taxes directly discounting it from your salary each month according to calculations by the HMRC (Her Majesty’s Revenue and Customs) in the UK (the equivalent to “Hacienda” in Spain). It is difficult to include deductible expenses to your Tax Return if you are employed. Moreover, generally the taxes you pay are higher than they should be. The HMRC calculate your monthly payments for the year and if you have not worked the full tax year you will be overcharged. You can claim this money back but it costs time and “paperwork”. Should this happen to be the case, we will advise you on how to do this. It is notthe best way that we would recommend you pay your taxes

• Another way is through an
Umbrella Company. You firstly have to register in the HMRC as “Self-Employed/Sole”, the equivalent of being an “Autonomo” in Spain. This can be done on-line and the process is simple. As you work, you send your worksheets to the Umbrella Company and will bill your Locum Agency. The Umbrella Company is also responsible for paying your taxes and you can include multiple expenses that you can deduct from your taxes. You will have to pay a fee to the company, usually weekly or a percentage of each of your invoices that can be deducted from your tax. This is the recommended option for short-term work or even if you work for various companies. We will put you in contact with the most efficient and economic Umbrella Companies.

• You can also pay your taxes as a
Limited Company (Compañía Limitada) that you will have to create. This is the best option if you work for longer periods even if intermittently. This is not recommended, although, for example you win less than £25,000.00 a year. You will need to contract an accountant who will deal with all the paperwork. There are many more expenses that you can include to deduct from your Tax return and generally it has many advantages. If needed, we will also advise you and help you get in contact with efficient accounting for your Limited Company.

 

National Insurance Contributions or NICs.

It refers to payments or contributions to the Social Security. It is different if you are an employee or you are self- employed. It is more convenient if you are self- employed, although in general terms, the contributions are not a big deal.

If you want more details on your
Tax Return (HMRC) and contributions to Social Security, there is a lot more information on the Internet. You can also go the official website of the government: www.gov.uk . I recommend you read the following information sheet issued by the HMRC that also includes some examples. This is the fiscal year 2014-2015
.

 

Council Tax or Impuesto Municipal.

It is a local tax, collected by local Councils to offer services such as education, police, roads, waste collection, library and community services. Each Council sets its own tax rate. It is paid by every citizen, with some exceptions. The amount you pay depends on the assessment of the house or property you live in according to the council. This is not necessarily the same a