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Tax Query - Help!

Tax Query - Help!

Old Jan 7th 2015, 12:18 am
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Question Tax Query - Help!

Hey guys

The whole filing tax thing is driving me nuts, so I thought I'd ask around to see what the general consensus is. My situation is pretty unique: I moved to the US in April 2014 on a J-1 visa as part of my research, however my salary is paid by my UK employers into my British bank account.

I was under the impression I would continue to pay income tax and NI in the UK; however, immediately prior to moving to the US, HMRC changed my tax code to NT (I only noticed this a couple of months ago - my bad!). So it appears I have being paying no income tax at all since moving here while continuing to pay 100% of my NI contributions.

I'm guessing HMRC expects me to file taxes here in the US? It's a tad strange as I thought the dual-taxation agreement states that individuals pay tax in the country they earn their wage?

I'd rather pay tax in the US, to be perfectly honest, as it means I pay less - and given I haven't put aside money for taxes since moving here, as I thought I was paying tax in the UK, I'm pretty screwed either way. I know there's a 2 year tax exemption clause for J-1 holders, but I intend to stay here for at least 3 years, so I'd rather start paying now (even if it means paying in instalments) instead of retrospectively after the 2-year agreement comes to an end.

Any help/advice would be much appreciated - I just emailed HMRC to clarify whether they want me to pay taxes here...have any of yous been in a similar situation?

Cheers
Vikram
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Old Jan 7th 2015, 1:24 am
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Default Re: Tax Query - Help!

Originally Posted by whazzisname View Post
Hey guys

The whole filing tax thing is driving me nuts, so I thought I'd ask around to see what the general consensus is. My situation is pretty unique: I moved to the US in April 2014 on a J-1 visa as part of my research, however my salary is paid by my UK employers into my British bank account.

I was under the impression I would continue to pay income tax and NI in the UK; however, immediately prior to moving to the US, HMRC changed my tax code to NT (I only noticed this a couple of months ago - my bad!). So it appears I have being paying no income tax at all since moving here while continuing to pay 100% of my NI contributions.

I'm guessing HMRC expects me to file taxes here in the US? It's a tad strange as I thought the dual-taxation agreement states that individuals pay tax in the country they earn their wage?

I'd rather pay tax in the US, to be perfectly honest, as it means I pay less - and given I haven't put aside money for taxes since moving here, as I thought I was paying tax in the UK, I'm pretty screwed either way. I know there's a 2 year tax exemption clause for J-1 holders, but I intend to stay here for at least 3 years, so I'd rather start paying now (even if it means paying in instalments) instead of retrospectively after the 2-year agreement comes to an end.

Any help/advice would be much appreciated - I just emailed HMRC to clarify whether they want me to pay taxes here...have any of yous been in a similar situation?

Cheers
Vikram
If you aren't going to take advantage of the 2 year agreement and taxes are paid, then you owe them to the US since that is where you are living and working. If you pay them to the UK, you'll later need to pay them to the US and try to get your money back from the UK.
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Old Jan 7th 2015, 1:37 am
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Default Re: Tax Query - Help!

Ah cool, cheers for that Michael!
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