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Tax when working for UK company in NZ?

Tax when working for UK company in NZ?

Old Mar 8th 2014, 5:19 pm
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Question Tax when working for UK company in NZ?

Hi All,
New to the board and hoping some knowledgeable folk can give some advice.
My OH and I are moving to Auckland in Sept and I am hoping to carry on working part time in my old London job. So paid in sterling while living in a leafy suburb of Auckland!

My question is how this will be taxed, presumably the double taxation agreement will stop me getting stung twice. But would there be any benefit to me arranging it as a contractor/freelancer and hence paid gross? or for tax purposes would it be no different from a normal job where PAYE is deducted by the company?

Would be very grateful for any personal experience of this.

Many thanks
James
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Old Mar 8th 2014, 6:34 pm
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Default Re: Tax when working for UK company in NZ?

If you live and work in New Zealand, no matter where your employer is or where he pays you, you are legally obliged to pay tax in New Zealand, at New Zealand rates. However, under the double taxation agreement between UK and NZ, if your UK employer deducts income tax in UK, you can offset that amount in monetary terms against your NZ liability. You must declare the UK income and convert it to NZ dollars when you do your NZ tax return. IRD (Inland Revenue Department) produces monthly conversion rates so that you can do this. PM me and I will give you a lot more detail, because, if you have investment income etc., you could end up in a provisional tax arrangement with IRD rather than a paye arrangement. For example, my wife is in a mixed arrangement as she is employed locally (paye) and has investment income from both New Zealand and overseas.
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Old Mar 8th 2014, 6:45 pm
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Default Re: Tax when working for UK company in NZ?

have a read through this and see if it helps

https://www.ird.govt.nz/internationa...ngtax/#taxable
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Old Mar 8th 2014, 7:06 pm
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Default Re: Tax when working for UK company in NZ?

In terms of NZ tax I don't think it would make a lot of difference in the end, but it would be worth investigating what rights you would lose moving from paye to contract (e.g. redundancy, holiday, maternity). Depending on your rate of pay it could end up to be a tidy sum.

If you are a contractor and moving to self assessment you can deduct business expenses. That's the only benefit I can see, but if these are negligible it make me wonder if you should remain as a permanent staff member rather than a contractor.

I'm no expert though, so you need to check your rights.
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Old Mar 9th 2014, 10:19 am
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Default Re: Tax when working for UK company in NZ?

Much appreciate your guidance, thank you.
From what nzneville said and MrsFychan's link gave me I am starting to get an understanding of how the system works. I spent some time looking at the UK inland revenue web pages looking at double taxation rules but I was getting nowhere.

JMH - good point on pension and redundancy. Certainly for the pension it is easy to see the contribution the company (university in my case) makes in % and weigh that up as part of the pro/con of contract vs PAYE.

Am now going to do some research on rental income from a UK property - from what I have seen and you folk have said it will be pretty much exactly the same. But I want to look into which country's rules I have to follow on what expenses can be offset against the income.

nzneville - will hold off from pm for now thanks, as need to read a bit more. I can see that as and when I also get some paid work in NZ, your mixed arrangement might well be worth looking into.

Thanks again
James
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Old Mar 12th 2014, 4:14 am
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Default Re: Tax when working for UK company in NZ?

My husband has been doing this for over 5 years since we arrived. His UK employer didn't want to lose him but they didn't want to keep him as an employee, so we set up a Ltd company here and he just invoices them for the hours he works and pays all his tax here (as the others have said, that's what the IR here demands). They just negotiated an hourly rate based on his gross annual income.

If you need an accountant to help you out, we thoroughly recommend ours - he's another expat and is used to dealing with people in our situation. He's in Chch but we've lived in Auckland and now Tauranga and have never had problems communicating with him. Feel free to drop me a PM if you'd like his contact details!

Oh, and welcome to NZ by the way We're on our way out in search of a new adventure, but have very much enjoyed our time here.
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Old Mar 16th 2014, 5:23 pm
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Default Re: Tax when working for UK company in NZ?

Good to hear being paid by contract is not a problem, thanks for your reply and welcome! My work HR are just looking into whether there are any rules against me carrying on being paid as normal, keeping the pension contribution would be nice but will switch to contract if needs be.
Will PM you about tax advisor thanks.
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Old Mar 18th 2014, 2:21 am
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Default Re: Tax when working for UK company in NZ?

This post is very interesting to me as I have just been asked to do some contracting work for my old company in the UK and I was wondering how this would work.

Could I bill them from here under my name and be self employed rather than create a company. Also I was going to get the funds paid to my UK account, does this also have any affect on the UK/NZ tax.

Thanks
sam
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