Working in NZ paid in sterling? Need help!
Jan 11th 2007, 8:16 am
#33
Forum Regular
Thread Starter
Joined: Aug 2006
Location: Torbay, North Shore, Auckland
Posts: 159
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
Jan 11th 2007, 10:50 am
#34
Joined: Aug 2006
Posts: 7,208
Re: Working in NZ paid in sterling? Need help!
Wow thats excellent, seems all straight forward to me, had a couple of businesses in this country so i assume it wont be too different. Do you have any knowledge to to whether this will be a help or a hindrence when it come to obtaining my PR as I amy going over on a Working Holiday Visa and working towards my PR?
Jan 12th 2007, 11:01 pm
#35
Joined: Nov 2006
Posts: 536
Re: Working in NZ paid in sterling? Need help!
If you can get a card that'll do both and not charge then i feel that's a fab way round the situation.
Mandie
