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bigduckontax, Accountant
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Hi Advice needed on international tax issue. I am a South

Customer Question

Hi

Advice needed on international tax issue.

I am a South African citizen currently resident in the UK (I have a valid UK Residence Visa allowing me to live and work in the UK). I am a freelance writer working mainly in the television industry. Long term, my plan is to get British-based work from British companies that will obviously be liable for British taxation. However, my current situation is not so simple:

Although living in London, I write for a South African soap opera. At the moment I am being taxed at source in South Africa and the money I earn for submitting scripts to the South African television production company, via e-mail, is being paid into a South African bank account with the tax going to South African Revenue Services.

1. Am I in breach of UK tax laws?
2. Do I need to declare this income in the UK?
3. If the answer to either of the above questions is 'yes', what do I need to do going forward?
4. Are there a range of options I could consider - e.g., setting up a company either in South Africa or the UK and being paid via that company?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Question 1 - No.

Question 2 - Yes, you should.

Question 3 - The tax being deducted by the South African authorities is, under the Double Taxation Treaty between the UK and SA, allowable as a tax credit against any UK Income Tax liability.

You could set up companies as you suggest. I am not expert in SA taxation, this being an UK taxation advice site, but if the moneys can be held in a SA company without tax penalty it would obviously be to your advantage presuming your SA work being contracted with the company, not you personally.

If you use an UK company and are paid by them then the company will have, assuming you are a director, to operate PAYE and NI contributions on your salary. If you draw it as dividends these are not allowable against the company's Corporation Tax (CT) position and CT at 20% would be levied.

Always bear in mind Benjamin Franklin's dictum that in life there are but two certainties, death and taxes.
Customer: replied 3 years ago.

Thank you, Keith

One more thing: is there any legal problem with me continuing to be paid via my South African bank account despite being resident here?

Expert:  bigduckontax replied 3 years ago.
Delighted to have been of assistance.

As for the payment into your SA bank account, no problem at all. In general terms we don't have exchange controls as such in the UK anymore. Large cash movements are often scrutinised, however, as a precaution against international and indeed domestic, money laundering.

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Expert:  bigduckontax replied 3 years ago.
Thank you for your support.

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