With the UK being one of the friendliest tax havens in the EU, many expats from countries all over the world are seeing the advantages of moving here and taking advantage of the wide range of tax reliefs our country offers. In fact, if you are from the United States and you work in the UK, you can reduce your UK tax obligations using these very same tax reliefs.
Now, you might be wondering how you can utilise UK tax reliefs to reduce the amount of taxes you owe. To answer that, we are going to share some of the most popular ways to do it. Let’s take a look:
Ways To Reduce Your Tax When Working In The UK
Overseas Workdays – any income earned by working outside of the UK will not be taxed as long as it is not remitted in the UK. This tax relief is applicable for the first two years of working within the UK. This is rarely extended, but when it is, you get three years.
Foreign Taxes – there is a foreign tax credit that you can take advantage of which covers any foreign taxes paid overseas on income that has also been taxed in the UK.
Relocation Relief – you can receive up to £8,000 of your qualifying relocation expenses when you relocate to, or leave the UK.
UK As A Temporary Workplace – if the UK is considered a temporary workplace to you, you can claim a deduction for your accommodation, travel and subsistence expenses.
Foreign Pensions – your employer’s contributions to your pension fund can be considered taxable income unless you take advantage of a foreign pension relief scheme.
Shelter Offshore Income – if you are non-“domiciled”, you can make an annual election to be taxed on a “remittance” basis. This means that some of your offshore income can be effectively sheltered from UK tax as long as your income is remitted to the UK.
Tax Free Allowances – there is an annual tax free personal allowance that you can claim of £10,600 which can be used to reduce your taxable income in the UK. It is based on your level of UK and foreign income.
Contact British American Tax
To learn more ways to reduce your tax when working in the UK, contact British American Tax today and consult with an expert tax advisor who can answer any questions you might have about taking a pro-active approach to your tax planning.
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