Working in NZ paid in sterling? Need help!
Jan 9th 2007, 4:42 pm
#16
Banned
Joined: Jan 2007
Posts: 28
Re: Working in NZ paid in sterling? Need help!
I dont have the answer, but i dont think trigod is trying "to get one over" on the taxman, just looking at his options. How about an offshore account??
Jan 9th 2007, 5:49 pm
#17
Galaxy 1: Cadbury's 0
Joined: May 2005
Posts: 1,606
Re: Working in NZ paid in sterling? Need help!
Good plan. Can you suggest any?
I have looked into this and haven't found any to make it worthwhile - ie the interest rates, whilst paid gross into the account, are so low that it makes more sense to take an onshore account with much higher rates yet subject to the tax - thus the net amount being higher. Absolutely daft. There must be some that have good rates.
I have looked into this and haven't found any to make it worthwhile - ie the interest rates, whilst paid gross into the account, are so low that it makes more sense to take an onshore account with much higher rates yet subject to the tax - thus the net amount being higher. Absolutely daft. There must be some that have good rates.
Jan 9th 2007, 6:20 pm
#18
Banned
Joined: Jan 2007
Posts: 28
Re: Working in NZ paid in sterling? Need help!
Good plan. Can you suggest any?
I have looked into this and haven't found any to make it worthwhile - ie the interest rates, whilst paid gross into the account, are so low that it makes more sense to take an onshore account with much higher rates yet subject to the tax - thus the net amount being higher. Absolutely daft. There must be some that have good rates.
I have looked into this and haven't found any to make it worthwhile - ie the interest rates, whilst paid gross into the account, are so low that it makes more sense to take an onshore account with much higher rates yet subject to the tax - thus the net amount being higher. Absolutely daft. There must be some that have good rates.
sadly i cant recommend as i have not done this, i think maybe as its just wages being talked about here rather than investment it could be an option? the Nationwide does seem to be a good option though.
Jan 10th 2007, 7:39 am
#19
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Joined: Dec 2005
Location: khandallah, wellington
Posts: 720
Re: Working in NZ paid in sterling? Need help!
Hello all,
I am currently negotiating with my current employer to continue working for them on a freelance basis when I move to NZ. I am a Graphic Designer so working remotely is very easy.
I was just going to have the money paid into my UK account and transfer the cash as and when we need it. Obviously this is great from the point of view of being paid in sterling but I am just wandering if anyone else can offer any experience on the tax side of things? Obviously I wont be working in the UK so wont be on the tax register, but I wont be on the NZ tax system either.
Any thoughts most welcome?
I am currently negotiating with my current employer to continue working for them on a freelance basis when I move to NZ. I am a Graphic Designer so working remotely is very easy.
I was just going to have the money paid into my UK account and transfer the cash as and when we need it. Obviously this is great from the point of view of being paid in sterling but I am just wandering if anyone else can offer any experience on the tax side of things? Obviously I wont be working in the UK so wont be on the tax register, but I wont be on the NZ tax system either.
Any thoughts most welcome?
Jan 10th 2007, 7:56 am
#20
Forum Regular
Thread Starter
Joined: Aug 2006
Location: Torbay, North Shore, Auckland
Posts: 159
Re: Working in NZ paid in sterling? Need help!
Yes you are right, we all know that the taxman cant be beaten legally, so I just want to be aware of the best way to utilise a potentially good income stream. Off shore account does look interesting.
Jan 10th 2007, 7:57 am
#21
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Thread Starter
Joined: Aug 2006
Location: Torbay, North Shore, Auckland
Posts: 159
Re: Working in NZ paid in sterling? Need help!
Transfer your pounds into an offshore sterling account - your bank will give you a preferential exchange rate to transfer into your NZ $ account - a % shade off standard rate, as and when you see the exchange rate being favourable - the shade rate depends on how much and how regular. Recommend you employ a NZ accountant who knows about sterling earnings offshore. There are reciprocal tax arrangements between UK/NZ - you can't avoid tax but your accountant will sort out what the best deal is for you - also depends on assets/other income derived in the Uk, etc.
Jan 10th 2007, 9:20 am
#22
Memetchi
Joined: Oct 2005
Posts: 201
Re: Working in NZ paid in sterling? Need help!
You're not liable for UK tax because you aren't tax-resident there. As a freelancer you aren't employed by the UK company so you're not subject to UK PAYE or NI.
There's no particular need for an offshore account. Ask your bank for a form to get gross interest paid into your bank account. This interest will be tax-free for four years after you arrive in NZ, although this is not such a big deal at the moment because NZ cash deposit rates are around 32% above UK rates. Alternatively you could get the UK company to transfer to your NZ account, using telegraphic transfers or Ozforex for a better rate.
As a self-employed person in NZ you can claim expenses for the part of your house that you use as an office (good excuse to take the biggest room) and other expenses like power and heating, and claim back GST (equivalent of VAT) on office supplies and equipment. Your services to an offshore company are zero-rated for GST so accounting for GST is very easy as you don't have to pay anything. There is some simple record-keeping and form-filling required twice a year, it's very easy and there is more than enough info on the IRD website.
Last edited by cypherpunk; Jan 10th 2007 at 9:25 am.
Jan 10th 2007, 9:39 am
#23
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Thread Starter
Joined: Aug 2006
Location: Torbay, North Shore, Auckland
Posts: 159
Re: Working in NZ paid in sterling? Need help!
If you've left the UK permanently you become tax resident in New Zealand so you have to register and pay tax there on all your income, including income from the UK, even if you don't transfer it to NZ.
You're not liable for UK tax because you aren't tax-resident there. As a freelancer you aren't employed by the UK company so you're not subject to UK PAYE or NI.
There's no particular need for an offshore account. Ask your bank for a form to get gross interest paid into your bank account. This interest will be tax-free for four years after you arrive in NZ, although this is not such a big deal at the moment because NZ cash deposit rates are around 32% above UK rates. Alternatively you could get the UK company to transfer to your NZ account, using telegraphic transfers or Ozforex for a better rate.
As a self-employed person in NZ you can claim expenses for the part of your house that you use as an office (good excuse to take the biggest room) and other expenses like power and heating, and claim back GST (equivalent of VAT) on office supplies and equipment. Your services to an offshore company are zero-rated for GST so accounting for GST is very easy as you don't have to pay anything. There is some simple record-keeping and form-filling required twice a year, it's very easy and there is more than enough info on the IRD website.
You're not liable for UK tax because you aren't tax-resident there. As a freelancer you aren't employed by the UK company so you're not subject to UK PAYE or NI.
There's no particular need for an offshore account. Ask your bank for a form to get gross interest paid into your bank account. This interest will be tax-free for four years after you arrive in NZ, although this is not such a big deal at the moment because NZ cash deposit rates are around 32% above UK rates. Alternatively you could get the UK company to transfer to your NZ account, using telegraphic transfers or Ozforex for a better rate.
As a self-employed person in NZ you can claim expenses for the part of your house that you use as an office (good excuse to take the biggest room) and other expenses like power and heating, and claim back GST (equivalent of VAT) on office supplies and equipment. Your services to an offshore company are zero-rated for GST so accounting for GST is very easy as you don't have to pay anything. There is some simple record-keeping and form-filling required twice a year, it's very easy and there is more than enough info on the IRD website.
Last edited by trigod; Jan 10th 2007 at 9:41 am.
Jan 10th 2007, 10:04 am
#24
BE Forum Addict
Joined: Aug 2003
Location: New Zealand
Posts: 2,389
Re: Working in NZ paid in sterling? Need help!
If you've left the UK permanently you become tax resident in New Zealand so you have to register and pay tax there on all your income, including income from the UK, even if you don't transfer it to NZ.
You're not liable for UK tax because you aren't tax-resident there. As a freelancer you aren't employed by the UK company so you're not subject to UK PAYE or NI.
You're not liable for UK tax because you aren't tax-resident there. As a freelancer you aren't employed by the UK company so you're not subject to UK PAYE or NI.
We lived in Singapore and were paid in UK.( The exchange rate was in our favour. ) We paid tax in Singapore on our salary, and also submitted a tax form to uk tax man for the house rental earned on uk house.(Didn't need to pay much tax though as the upkeep/ decoration seemed to off set it.)
Jan 10th 2007, 10:23 am
#25
Melbourne Australia
Joined: Feb 2006
Posts: 4,169
Re: Working in NZ paid in sterling? Need help!
Hello all,
I am currently negotiating with my current employer to continue working for them on a freelance basis when I move to NZ. I am a Graphic Designer so working remotely is very easy.
I was just going to have the money paid into my UK account and transfer the cash as and when we need it. Obviously this is great from the point of view of being paid in sterling but I am just wandering if anyone else can offer any experience on the tax side of things? Obviously I wont be working in the UK so wont be on the tax register, but I wont be on the NZ tax system either.
Any thoughts most welcome?
I am currently negotiating with my current employer to continue working for them on a freelance basis when I move to NZ. I am a Graphic Designer so working remotely is very easy.
I was just going to have the money paid into my UK account and transfer the cash as and when we need it. Obviously this is great from the point of view of being paid in sterling but I am just wandering if anyone else can offer any experience on the tax side of things? Obviously I wont be working in the UK so wont be on the tax register, but I wont be on the NZ tax system either.
Any thoughts most welcome?
You may qualify for the 4 year exemption
Also look into the meaning of "domicile" status rather than just tax residency there is a big difference.
Jan 10th 2007, 5:22 pm
#26
BE Enthusiast
Joined: Dec 2005
Location: khandallah, wellington
Posts: 720
Re: Working in NZ paid in sterling? Need help!
We were in same position for first few years in NZ - the offshore account isn't necessary if you have to utilise all UK funds as cashflow - if not, then the balance can sit in a sterling offshore a/c until the exchange rate looks good/better/best - it's a while since I did that but at that time, there were some quite dramatic currency fluctuations - I could ring up the bank and transfer at spot rate with our agreed shade - great fun!
Jan 10th 2007, 9:51 pm
#27
Forum Regular
Joined: Oct 2006
Location: UK
Posts: 175
Re: Working in NZ paid in sterling? Need help!
I did precisely what you describe....
Assuming you are going to be resident in NZ for more than the qualifying period per year (normally in the region of 6 months + 1 day or some variation thereof) you be be considered tax resident in nz and liable for Income Tax and ACC in NZ and the reciprocal will apply in the UK (eg NOT liable).
Assuming your turnover is above a certain figure you will also have to be GST (VAT equiv) registered. This is where it gets tricky;
- if the service or product you "export" to the UK is SOLEY for consumption outside of NZ- then you can charge as zero rate eg; Net x 0.0% you will need to get dispensation from the IRD (who are very helpful) in advance
- if any element of it is consumed inside NZ you have to collect GST at standard rate on that amount - in the UK this would be the same as collecting VAT
- in the UK that would be fine because the customer can reclaim it as output tax
BUT
- your UK customer cannot reclaim GST from the NZ IRD (unless they are also NZ GST registered) and this means you have to either inflate your prices or absorb the hit (or come to a mutual agreement between you and your client) - either way it makes you uncompetitive to the tune of the standard GST rate (if i remember it was 12.5% when i was there)
The easiest way to manage the payment side of things (IME) is to invoice your UK "employer"/"client" (whatever you wish to call it) in NZD on the invoice lines then do a conversion (using IRD supplied exchange rates that they publish on the web) to GBP on the invoice total - and get paid into a UK Bank Account - then just transfer electonically. This is perfectly acceptable practice with the IRD.
Remember you are paying Tax in NZD so save your tax money in NZD to protect yourself from negative fluctuations.
In summary - its perfectly doable and a lot easier than it sounds from the above - once you speak to the IRD it becomes much clearer. They are very open to foreign money coming into the country for obvious reasons and will therefore help smooth the path accordingly.
Jesus I should be an accountant i never knew i could be so boring!
hth
ss
Assuming you are going to be resident in NZ for more than the qualifying period per year (normally in the region of 6 months + 1 day or some variation thereof) you be be considered tax resident in nz and liable for Income Tax and ACC in NZ and the reciprocal will apply in the UK (eg NOT liable).
Assuming your turnover is above a certain figure you will also have to be GST (VAT equiv) registered. This is where it gets tricky;
- if the service or product you "export" to the UK is SOLEY for consumption outside of NZ- then you can charge as zero rate eg; Net x 0.0% you will need to get dispensation from the IRD (who are very helpful) in advance
- if any element of it is consumed inside NZ you have to collect GST at standard rate on that amount - in the UK this would be the same as collecting VAT
- in the UK that would be fine because the customer can reclaim it as output tax
BUT
- your UK customer cannot reclaim GST from the NZ IRD (unless they are also NZ GST registered) and this means you have to either inflate your prices or absorb the hit (or come to a mutual agreement between you and your client) - either way it makes you uncompetitive to the tune of the standard GST rate (if i remember it was 12.5% when i was there)
The easiest way to manage the payment side of things (IME) is to invoice your UK "employer"/"client" (whatever you wish to call it) in NZD on the invoice lines then do a conversion (using IRD supplied exchange rates that they publish on the web) to GBP on the invoice total - and get paid into a UK Bank Account - then just transfer electonically. This is perfectly acceptable practice with the IRD.
Remember you are paying Tax in NZD so save your tax money in NZD to protect yourself from negative fluctuations.
In summary - its perfectly doable and a lot easier than it sounds from the above - once you speak to the IRD it becomes much clearer. They are very open to foreign money coming into the country for obvious reasons and will therefore help smooth the path accordingly.
Jesus I should be an accountant i never knew i could be so boring!
hth
ss
Last edited by SecretSquirrel; Jan 10th 2007 at 9:56 pm.
Jan 10th 2007, 9:53 pm
#28
Account Closed
Joined: Oct 2006
Posts: 1,585
Re: Working in NZ paid in sterling? Need help!
I did precisely what you describe....
Assuming you are going to be resident in NZ for more than the qualifying period per year (normally in the region of 6 months + 1 day or some variation thereof) you be be considered tax resident in nz and liable for Income Tax and ACC in NZ and the reciprocal will apply in the UK (eg NOT liable).
Assuming your turnover is above a certain figure you will also have to be GST (VAT equiv) registered. This is where it gets tricky;
- if the service or product you "export" to the UK is SOLEY for consumption outside of NZ- then you can charge as zero rate eg; Net x 0.0% you will need to get dispensation from the IRD (who are very helpful) in advance
- if any element of it is consumed inside NZ you have to collect GST at standard rate on that amount - in the UK this would be the same as collecting VAT but that would be fine because the customer can reclaim it - your UK customer cannot reclaim GST from the NZ IRD and this means you have to either inflate your prices or absorb the hit (or come to a mutual agreement between you and your client) - either way it makes you uncompetitive to the tune of the standard GST rate (if i remember it was 12.5% when i was there)
The easiest way to manage the payment side of things (IME) is to invoice your UK "employer"/"client" (whatever you wish to call it) in NZD on the invoice lines then do a conversion (using IRD supplied exchange rates that they publish on the web) to GBP - and get paid into a UK Bank Account - then just transfer electonically.
Remember you are paying Tax in NZD so save your tax money in NZD to protect yourself from negative fluctuations.
In summary - its perfectly doable and a lot easier than it sounds from the above - once you speak to the IRD it becomes much clearer. They are very open to foreign money coming into the country for obvious reasons and will therefore help smooth the path accordingly.
Jesus I should be an accountant i never knew i could be so boring!
hth
ss
Assuming you are going to be resident in NZ for more than the qualifying period per year (normally in the region of 6 months + 1 day or some variation thereof) you be be considered tax resident in nz and liable for Income Tax and ACC in NZ and the reciprocal will apply in the UK (eg NOT liable).
Assuming your turnover is above a certain figure you will also have to be GST (VAT equiv) registered. This is where it gets tricky;
- if the service or product you "export" to the UK is SOLEY for consumption outside of NZ- then you can charge as zero rate eg; Net x 0.0% you will need to get dispensation from the IRD (who are very helpful) in advance
- if any element of it is consumed inside NZ you have to collect GST at standard rate on that amount - in the UK this would be the same as collecting VAT but that would be fine because the customer can reclaim it - your UK customer cannot reclaim GST from the NZ IRD and this means you have to either inflate your prices or absorb the hit (or come to a mutual agreement between you and your client) - either way it makes you uncompetitive to the tune of the standard GST rate (if i remember it was 12.5% when i was there)
The easiest way to manage the payment side of things (IME) is to invoice your UK "employer"/"client" (whatever you wish to call it) in NZD on the invoice lines then do a conversion (using IRD supplied exchange rates that they publish on the web) to GBP - and get paid into a UK Bank Account - then just transfer electonically.
Remember you are paying Tax in NZD so save your tax money in NZD to protect yourself from negative fluctuations.
In summary - its perfectly doable and a lot easier than it sounds from the above - once you speak to the IRD it becomes much clearer. They are very open to foreign money coming into the country for obvious reasons and will therefore help smooth the path accordingly.
Jesus I should be an accountant i never knew i could be so boring!
hth
ss
