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JimJam



Joined: 06 Mar 2010
Posts: 66
Location: UK

PostPosted: Mon May 21, 2012 5:38 am    Post subject: Reply with quote

Dedicated wrote:
Everybody who is employed in the UK, up to retirement age, pays National Insurance which goes towards state benefits etc etc.

If you live abroad and want to maintain your state benefits entitlement (eg. pension) it's worth paying.


Firstly, it's a myth that National Insurance goes into a special separate pot which is used for state benefits etc. It is treated as any another tax and while it does allow you to get the state pension you have to get "qualifying years". That means working consistently through the year.

Paying 450 national insurance and not getting a qualifying year is unfair. So we should be able to reclaim it.

Also you can't claim national health care, JSA, child benefit etc from abroad so there seems to be little point in paying. I suppose if you need an operation or something you could fly back. But I don't think you need proof of NI payment to get access to those things.
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PC Parrot



Joined: 11 Dec 2009
Posts: 351
Location: Moral Police Station

PostPosted: Mon May 21, 2012 7:40 am    Post subject: Reply with quote

I would say it's unfair of people not to pay tax or national insurance in the UK for 20 odd years and then turn up looking for free health-care, housing, and other state-benefits when they're broke and no longer employable elsewhere in the world ...

That may or may not apply to you ... but while you're working in the UK over the summer, what would you do if you were involved in an accident ... would you expect the British taxpayer to pay for your hospital treatment?
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JimJam



Joined: 06 Mar 2010
Posts: 66
Location: UK

PostPosted: Mon May 21, 2012 8:01 am    Post subject: Reply with quote

PC Parrot wrote:
I would say it's unfair of people not to pay tax or national insurance in the UK for 20 odd years and then turn up looking for free health-care, housing, and other state-benefits when they're broke and no longer employable elsewhere in the world ...

That may or may not apply to you ... but while you're working in the UK over the summer, what would you do if you were involved in an accident ... would you expect the British taxpayer to pay for your hospital treatment?


Yes that is unfair but it's not geographic. Many people live in the UK for many years without paying tax and are in receipt of benefits during that time. Welfare is inherently unfair because it takes from producers of wealth and gives to consumers.

Actually successful teachers such as me have consistently repatriated earnings to the UK meaning we have considerable taxable assets in the country. I pay UK tax all year round on my savings and investments and, ironically, would have too much saved to be able to receive means tested benefits such as JSA.

Not living in the UK means I pay tax without receiving any benefit. And visiting to work for 6 weeks a year means I pay NI without getting a pension. I think a trip to the doctor's or two is the least I deserve.

The real unfairness is the British underclass who, to use your terms, are broke and can't be employed anywhere in the world. That's why we have to import so many Polish people.

Anyway, I'll just get back to reading the Daily Mail...
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PC Parrot



Joined: 11 Dec 2009
Posts: 351
Location: Moral Police Station

PostPosted: Mon May 21, 2012 10:40 am    Post subject: Reply with quote

JimJam wrote:
PC Parrot wrote:
I would say it's unfair of people not to pay tax or national insurance in the UK for 20 odd years and then turn up looking for free health-care, housing, and other state-benefits when they're broke and no longer employable elsewhere in the world ...

That may or may not apply to you ... but while you're working in the UK over the summer, what would you do if you were involved in an accident ... would you expect the British taxpayer to pay for your hospital treatment?


Yes that is unfair but it's not geographic. Many people live in the UK for many years without paying tax and are in receipt of benefits during that time.


The difference is that the people who've been doing it in the UK were not (or should not have been) living the life of riley beforehand. The TEFLer who chooses to spend all of his cash on holidays and who makes no provision for retirement will have lead a more active life than a terminal benefit claimant.

At least the people who have worked in the UK but made no provision for old age have paid taxes to the treasury along the way.

Anyway, if you're paying 442.56 in national insurance contributions, why not top it up to the 660 mark and make it a full contributing year .. for each year of payments you have, you will receive a 1/30 part of a pension .. in this way, your 442.56 is not going down the drain ..

For the record, I've kept up with my NI contributions, and I pay UK tax on income from my UK investments .. this year it's about 650 tax and 650 NI ..
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Perilla



Joined: 09 Jul 2010
Posts: 773
Location: Hong Kong

PostPosted: Mon May 21, 2012 11:46 pm    Post subject: Reply with quote

PC Parrot wrote:

For the record, I've kept up with my NI contributions, and I pay UK tax on income from my UK investments .. this year it's about 650 tax and 650 NI ..


I have also made most of my NI payments in the 15 years I've been in Asia - actually I missed payments for the first three years, but that won't make much difference to my eventual pension, assuming I make it to 67.

But, regarding the tax on investments mentioned above, I'm wondering what sort of investments require you to pay tax if you're overseas?
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PC Parrot



Joined: 11 Dec 2009
Posts: 351
Location: Moral Police Station

PostPosted: Tue May 22, 2012 3:36 am    Post subject: Reply with quote

If you've only missed 3 years, then by the time you're 67, you'll have way more than the required 30 years for a full pension .. I personally won't be paying voluntary contributions after I hit the 30 year period ... 5 to go .. I was lucky and was able to back pay from 2009 all the way to 1996 without paying (much of) a penalty .. apparently the government had made an error in not informing people of their expiring payment periods ... so I was able to jump through the loophole ... it cost me 4,600 and saved me several thousand quid ..

If they fiddle around with the qualifying period later on, which they could well do, I'll either pay a bit more or settle for a part pension ... after all, the state pension is best regarded as nothing more than a little bit of extra pocket money ..

Any income generated in the UK is taxable in the UK .. double taxation treaties exist but generally speaking, bank interest automatically gets taxed at source, share dividends too ..

Property income requires a tax return to be submitted and tax to be paid ..
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Perilla



Joined: 09 Jul 2010
Posts: 773
Location: Hong Kong

PostPosted: Tue May 22, 2012 4:31 am    Post subject: Reply with quote

PC Parrot wrote:
If you've only missed 3 years, then by the time you're 67, you'll have way more than the required 30 years for a full pension .. I personally won't be paying voluntary contributions after I hit the 30 year period ... 5 to go .. I was lucky and was able to back pay from 2009 all the way to 1996 without paying (much of) a penalty .. apparently the government had made an error in not informing people of their expiring payment periods ... so I was able to jump through the loophole ... it cost me 4,600 and saved me several thousand quid ..

If they fiddle around with the qualifying period later on, which they could well do, I'll either pay a bit more or settle for a part pension ... after all, the state pension is best regarded as nothing more than a little bit of extra pocket money ..

Any income generated in the UK is taxable in the UK .. double taxation treaties exist but generally speaking, bank interest automatically gets taxed at source, share dividends too ..

Property income requires a tax return to be submitted and tax to be paid ..


I meant I missed three years of the 15 I've been in Asia. There are other years missing, including three as an undergraduate and one spent wandering around South America. Methinks I've paid around 23 or 24 years of NI in total, give or take.

Actually, I know the pension isn't going to be anything spectacular, but I reckon it'll be very useful income when I'm retired, whatever it amounts to. One thing is for sure, it'll be a lot better than nothing.

So, regarding the tax in the UK thing, basically you own property there and you rent it out - and that's what you pay tax on?
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JimJam



Joined: 06 Mar 2010
Posts: 66
Location: UK

PostPosted: Tue May 22, 2012 5:20 am    Post subject: Reply with quote

Perilla wrote:
basically you own property there and you rent it out - and that's what you pay tax on?


You pay tax on any interest which is earned in the UK. So that can be interest on savings, bonds, share dividends, property income etc. etc. You also have to pay capital gains (over a certain threshold) on any gains from selling property, shares or other assets which are in the UK.
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PC Parrot



Joined: 11 Dec 2009
Posts: 351
Location: Moral Police Station

PostPosted: Tue May 22, 2012 5:56 am    Post subject: Reply with quote

Perilla wrote:
basically you own property there and you rent it out - and that's what you pay tax on?


Yes ... in London town ..

JimJam wrote:
[You pay tax on any interest which is earned in the UK. So that can be interest on savings, bonds, share dividends, property income etc. etc. You also have to pay capital gains (over a certain threshold) on any gains from selling property, shares or other assets which are in the UK.


Actually, you are exempt from capital gains if you are non-resident for tax purposes .. unless they changed this in the last budget ..
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Perilla



Joined: 09 Jul 2010
Posts: 773
Location: Hong Kong

PostPosted: Tue May 22, 2012 6:48 am    Post subject: Reply with quote

JimJam wrote:
You pay tax on any interest which is earned in the UK. So that can be interest on savings, bonds, share dividends, property income etc. etc.


The only UK-based savings I have are invested in a few equities trusts. Originally, the sum invested was 5,000 pounds back in 1999. Today, that 5,000 pounds is worth just over 4,000 pounds. I don't think I'll be paying much interest. And if anyone can beat this spectacularly abysmal investment I'd be interested to know!
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Teacher in Rome



Joined: 09 Jul 2003
Posts: 1201

PostPosted: Tue May 22, 2012 8:25 pm    Post subject: Reply with quote

Quote:
Welfare is inherently unfair because it takes from producers of wealth and gives to consumers.


The vast amount of welfare (whether working tax credits, housing benefit etc) is actually paid to people in work (and producing wealth) rather than people out of work and totally reliant on the state. It's just that being in work doesn't guarantee you a high enough income to pay rent / mortgage, utility bills, tax, childcare etc. It doesn't even take much for those not yet needing state assistance to be pushed over the edge into poverty. Such are the times we live in.
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ancient_dweller



Joined: 12 Aug 2010
Posts: 415
Location: Woodland Bench

PostPosted: Tue May 22, 2012 10:17 pm    Post subject: Reply with quote

Quote:
JimJam wrote:
[You pay tax on any interest which is earned in the UK. So that can be interest on savings, bonds, share dividends, property income etc. etc. You also have to pay capital gains (over a certain threshold) on any gains from selling property, shares or other assets which are in the UK.


Actually, you are exempt from capital gains if you are non-resident for tax purposes .. unless they changed this in the last budget ..


interest is not a capital gain - it is income
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ancient_dweller



Joined: 12 Aug 2010
Posts: 415
Location: Woodland Bench

PostPosted: Tue May 22, 2012 10:30 pm    Post subject: Reply with quote

btw - if you are taxed i your first pay check, call the tax man and ask them to change your code to 749L. So, you will get the tax returned in the next paycheck.

749L will give you your full allowance and only start taxing you when you go over your threshold. as pointed out 8100 or so for this tax year.

You could try to go self-employed, it would save your employer a fair whack in contributions. The employer pays pretty much the same tax and NI that you pay. But for self-employed people you are purely contractual and not an employee in the legal sense. You could ask your employer to split the gain.

You do of course miss out on all employment benefits... unfair dismissal rights, maternity leave etc...

There was another point touched on, the fact that salaries are low for a rich country. It seems that salaries at the lower end have stagnated for the past 10 years - probably even decreased in real terms. Employers haven't had to raise salaries at the lower end because 1. seemingly ever increasing house prices lulled people into a false sense of security, 2. cheap loans and credit cards gave people more cash to spend, 3. very generous welfare system where housing etc is paid for. So, employers haven't really needed to increase salaries.
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PC Parrot



Joined: 11 Dec 2009
Posts: 351
Location: Moral Police Station

PostPosted: Wed May 23, 2012 1:47 am    Post subject: Reply with quote

ancient_dweller wrote:
Quote:
JimJam wrote:
[You pay tax on any interest which is earned in the UK. So that can be interest on savings, bonds, share dividends, property income etc. etc. You also have to pay capital gains (over a certain threshold) on any gains from selling property, shares or other assets which are in the UK.


Actually, you are exempt from capital gains if you are non-resident for tax purposes .. unless they changed this in the last budget ..


interest is not a capital gain - it is income


Who said it was?
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ancient_dweller



Joined: 12 Aug 2010
Posts: 415
Location: Woodland Bench

PostPosted: Thu May 24, 2012 2:40 pm    Post subject: Reply with quote

Quote:
Savings and investment income (except rental income)

Savings and investment income includes:

interest from bank and building society accounts
dividends on shares
interest on stocks


http://www.hmrc.gov.uk/international/tax-incomegains.htm#3

Quote:
Who said it was?


Her Majesty's Revenue and Customs said so
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