Tony Brokenshire

Provided you satisfy the UK's non residence rules whilst working in NZ, there should be little problem in achieving zero UK tax in respect of your earnings via obtaining an 'NT' tax code from HMRC. From an NZ tax perspective unless your UK employer agrees to register and satisfy NZ PAYE requirements/payment, then you will be classed as an 'IR56 taxpayer', which basically entails operating and paying over NZ PAYE yourself.
Non UK tax residency rules are not the simplest to navigate, although following introduction of the 'Statutory Residence Tests' they do now provide greater certainty of outcome than prior to their introduction.
Whether you will still be required to file an UK self Assessment return (despite zero UK income tax due on earnings in NZ) will be dependent upon your overall circumstances. It is clearly important to get it right in both the UK & NZ so as not to fall foul of either Revenue Authority.

kiwigirl78

Hi Tony

Thank you for this, it is really helpful, will have to contact the HMRC and find out how to go about it. Do you know if there is a time limit for how long you can do this?

Have a great day

Tony Brokenshire

I would firstly contact your UK employer...if they have not been deducting UK PAYE from salary for NZ duties (presumably you know whether they have or not), they may already have the NT code from HMRC. NZ IRD however will be keen to hear from you asap, as the IR56 procedure should have been followed from your first pay day for NZ duties. I'm assuming you have/will be working in NZ for more than 6 months?

GilesB

Hi,

My understanding from various sources - including bga on this forum and personal contact with the HMRC, the IRD and a UK tax accountant - is that it is indeed possible from a legal and tax perspective to live in NZ while being paid a salary in pounds sterling from a UK-based company with no physical or corporate presence in NZ. This is because NZ and the UK have a double-taxation treaty, which is a commitment by both countries to not tax the same income twice.

So, if you're living in NZ but being paid by a UK company, you have to pay tax to the IRD as you're resident in NZ - but, because of the Double Taxation treaty, the HMRC in the UK would not also tax this income.

Logistically, it seems that the way it works is that you complete a P85 form and send it to the HMRC when leaving the UK. The UK employer then operates a NT code (no tax deducted) and pays your salary gross. You also fill out another form from the HMRC and send that to the IRD ("Double Taxation: UK/New Zealand (SI 1984 number 365 and protocols) (Form New Zealand-Individual)". Once in NZ, you would have to account for your own tax return to file with the IRD, probably best done via an accountant.

Anyway, that's the process as I currently understand it. The major drawback of such an arrangement is obviously is that you will be at the mercy of exchange-rate fluctuations.

Tony Brokenshire

First contact your UK employer, they will be the entity that should apply for the NT code. Time-wise both the NT code and (if applicable) operation of the NZ IR56 procedure should have been in place from first payday in NZ. Normal time limits apply to filing your UK self assessment return (again, if appropriate). Good luck in sorting this out with HMRC from afar...I deal with them regularly, and have had many a late night session...they are not the most efficient!