LondonSquirrel

I'd just like to point something out from another thread that was closed due to some pretty ridiculous UK-bashing.

It is true that you don't need an NI Number to work or to get paid.

But there is another deeply entrenched myth, which is that you will pay 'Emergency Tax' (often confused with 'Basic Rate' tax) if you do not have an NI Number.

There is no connection between having or not having an NI number and your tax code. The tax code is determined by either the P45 you give to your employer, or the P46 and which statement you tick on it.

The current basic tax rate is 20%. It must have been an old link with 22% in it as it has not been 22% for a long time.

I work full time in payroll and have done for 26 years. The above is definitely true.

Jlidle

Hi Squirrel

I got a question relating to this. I am British and was working as a contractor for US companies in the US for about 10 years then worked as full employee of a company in Australia for 18 months in 2013/2014 and I am back in the UK for good now. I paid tax in Australia and brought back little savings with me, around 15K. I have used most of these (9K) in the past 8 months to live on while looking for a new job here so I have just about 6K left in my savings account and I have started a contracting job where I am being paid by an umbrella company that also deducts Employers Ni as well as my own Ni.. Now my question is re. my tax code. I found out that HMRC put me on a 500T tax code instead of the standard rate and I don't know why? Also, would HMRC tax me on the little savings I used to live on (15K) or on the 6K I've got left? Surely HMRC should not tax me again on the ,money I earned as a contractor in the US and then as an employee of an Australian co. in Australia?I'm confused having been away for so long. Thanks and regards

LondonSquirrel

Sorry, I have no idea as I am not a tax expert. You would need to contact HMRC.

Jlidle

Thank you. Yes I was planning to call them but I don't want them to turn around and decide that they should tax me on the little savings I've got left. I used most of it to avoid being on the doll while looking for a job so that UK tax payers don't have to pay for my coming back to the UK.. I 'm just trying to find out what I might be in for before calling them. cheers.

durham_lad

I'm not a tax expert but I'm near certain that you won't be taxed on the savings you brought into the UK. However, you will be taxed on the interest generated by those savings in any year that your total income is above the limit (~£10,000 for 2014)

Definitely talk to HMRC

Pulaski

This is correct - you are not taxed on the value of savings or money brought with you from overseas, but you may be liable for tax on any interest earned.

So far as the non-standard/ emergency tax code goes, they have assigned it on a "best guess" basis until they have specific information about your circumstances. As we are already into March it may be too late to get your tax code corrected in time for everything to sort itself out before the end of the tax year, so you may have to subject a tax return to get your over payment of tax reimbursed.

philwood

I second the advice given by the two posters above me re. tax on savings. I've never know to have to pay tax on the actual savings - only any earnings that come from them.

Having a certain amount of savings will affect any benefits that you might want to claim though. Again, not too sure of the threshold, but think it's around £8,000.

Also, in reply to the OP, you learn something new every day! I never knew that you didn't need an NI in order to work in the UK, so thanks for sharing this.

LondonSquirrel

Well, it's not that you 'don't need' an NI Number, more that you don't have to have one in order to start work and be paid. You are supposed to apply for one, or find out what the number was if you had one before, and supply HR or Payroll with it once you get it. So in that respect it is different to the US where you do need a SSN in order to start work. They just give you time to get one.

Not having an NI Number has two main effects. Firstly, if you claim any benefits like Jobseekers or a state pension, you might run into problems when you come to claim. Addresses can change, even names change, and there may be lots of people with the same sex and date of birth as well as name as you, but your NI # is unique, so all your NI contributions that go towards contributions-based benefits will be sure to be credited to your account if you have one. Secondly, if your employer has too many on the payroll with no NI#, they may find themselves subject to an inspection.

One further thing, an NI # is not proof of being legal to work in the UK, so it is the law that your employer (usually HR) asks for paperwork to verify your status. If they don't, they are at risk of a £20K fine per illegal worker. Usually if you are British or an EU citizen, your passport will suffice. If you are from outside the EU, you will need to also provide your visa (used to be a sticker in your passport like DH has, but now I believe it is a residence card).