UK Cruisers - Tax

[SV Kittiwake]

Hi All,

Sorry if this has been touched on before, can't find any threads.

We're setting off cruising in the spring and we're looking for some advice on the tax situation. We're planning on earning money through a bit of freelancing work mostly dealing with UK companies, and hopefully also a bit through Patreon. Total amount earned is likely to be below the income tax threshold.

What's the best thing to do in terms of tax? We're both currently living and paying tax in the UK, although my GF is an Italian citizen. Would it be best to set up a UK business and get paid for the freelancing work through that?

Cheers for any help.

[conachair]

If it's below the threshold then might be best just to leave it as is and declare any income on the self assessment form online, if you go non resident you loose a load of privileges like the euro health card and SSR eligibility.
For tax purposes it doesn't matter where the company that pays you is based, but where the work was actually carried out.

[GordMay]

Greetings and welcome aboard the CF, Kittiwake.

[SV Kittiwake]

Conachair, thanks for the help, we'll look into doing it that way.

Gord, thanks hopefully I'll be able to be a net contributor of knowledge once we set off and gain some to contribute!

[boatman61]

I'm a pensioner (most basic) and do the odd delivery on the side in an attempt to move up from subsistence level.. yet to reach the tax threshold with the combined income.. so I just don't bother..

[SV Kittiwake]

Cheers Boatman.

So do you mean you don't bother paying tax, or you don't bother filling in a tax return. Do you have a sole trader company set up? How do you deal with invoicing / payment for freelance work?

[boatman61]

Originally Posted by SV Kittiwake

Cheers Boatman.

So do you mean you don't bother paying tax,

Never earned enough to qualify.. its a UK State Pension

or you don't bother filling in a tax return.

As above.. so don't bother..

Do you have a sole trader company set up?

Not as such.. just made up a Web page and joined CF..

How do you deal with invoicing / payment for freelance work?

Each customer gets a contract and letter of authority to complete and sign.. they pay a deposit on signing up.. and the rest on completion direct into my account. US/OZ $$'s, Euro's, ££'s.. all denominations accepted..
I believe in KISS..
PS; I live in Portugal when not travelling.. also.. working for individuals as opposed to companies make a difference.. its a private contract.

[boatman61]

Something you have to remember is your still working age so if you want to retain your pension/health etc rights and benefits you'll need to maintain your NI Stamps at the very least.. believe there's an annual minimum payment one can make if 'self employed'

[inchcailloch]

Hi,

I've been in the same situation as you for the last 5 years

1. You are able to earn something like £11500 each pa (2017/18) remembering to claim all expenses!

2 I think you will be better off just doing it through your own personal taxation........though remember you must fill it in whether you've earned or not.

3 it is a pain and an expense one as everytime you log into your account they send you out a security code on your phone.........this was costing £2 every time logged in to receive it on my PAYG mobile when it to the Caribbean as O2 charge you everytime your phone rings whether you answer it or not!! Maybe best have a sim card dedicated for tax so nothing else comes through.......though remember to claim all this against tax. I have spoken to HMRC and thereally seems no way around the code being sent.

If your girlfriend is with the Italian tax maybe see if it's better to for her to pay there though remember to split it so you both get maximum benefits.

To evade taxation our MPs seem to be the people to get advice from, they seem experts on it along with Berlusconi!

[rodgoult]

Having worked self-employed all over the world but as a UK resident, I always have done a self-assessment form and paid National Insurance. Not doing so is unwise for the reasons others have given.

Apart from being illegal, non payment of NI and non-submission of a tax return prevents you having those reciprocal health benefits (at least for two years) as well as putting pension rights at risk.

If you declare non-residency to avoid tax and NI then any pension you get is frozen. No COL indexing. Lots of negatives, no positives.

I now live in the USA but still maintain UK residency.

[conachair]

Originally Posted by rodgoult

If you declare non-residency to avoid tax and NI then any pension you get is frozen. No COL indexing. Lots of negatives, no positives.

Depends how much you earn abroad and where , saving tens of thousands can be a big positive

Nothing stopping you keeping up with class 2 ni.

[SV Kittiwake]

In reply to inchcailloch and rodgoult

Yep, that's what It's looking like - to file a tax return you need to be registered as a sole trader I think(?), so that's what I'll do.

I'm not trying to evade / avoid any tax, I'm happy to pay my dues, and want to keep up with national insurance contributions, especially as one day I'd quite like the state pension and still want an EHIC for as long as they're available.

For the first few years we'll probably be in the Med, so communication shouldn't be such an issue.

Thanks for your help, much appreciated.

[conachair]

Originally Posted by SV Kittiwake

and want to keep up with national insurance contributions,

With national insurance, class 4 gets put on your self assessment bill, if you get over the threshold, class 2 pretty sure you can set up a direct debate but it's seperate from self assessment.

The inland revenue are actually very helpful if you go and talk to them.