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bigduckontax, Accountant
Category: Tax
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Just moved to England from USA, was retired but there's

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Hi Sam! My name is***** moved to England from USA, was retired but there's still demand for us old goats, so now negotiating for a new job. Never paid UK taxes so looking for lots of advice!

Hello Daniel, I am one of the experts on Just Answer and pleased to be able to help you with your question.

Do you have a National Insurance (NI) Number?

Customer: replied 11 months ago.
No. I'm USA, never had need for one. Age almost 62.

Before you can even think of applying for a job you will need a NI Number. You must visit your nearest Job Centre to start this quest.

If you do obtain employment your new employer will use your NI number to obtain a tax code for you. It should be of the order of 1185L which will be applied as an Emergency Code anyway. Your employer will then deduct Income Tax (IT) and NI contributions through the Pay As You Earn (PAYE) system from your earnings. As you are not a citizen of an EEA country you may not have an entitlement to a Personal Allowance (PA) in whuch case the tax code will be 0T.

I understand that a similar system is operated in the States. My colleague in NYC had similar deductions made when she was employed.

I do hope that you have found my reply of assistance.

Customer: replied 11 months ago.
in USA it's the SS number. But one can get employment without it. Will I also need the NI number to set up my own consultancy and do Self Assessment? The client is Dutch.

Whichever way the cat jumps you will need a NI Number, a laborious process I regret.

Customer: replied 11 months ago.
I like that saying! OK - to the Job Centre then. Next question: will I have to pay National Insurance, at my age?

Yes you will until you reach the statutory retirement age. This was recently adjusted as follows:

State pension age equalized at 65 in 2018. Increasing to 66 by 2020, 67 by 2028 and 68 by 2037. You could be badly caught with this age moving ahead as does your age.

Customer: replied 11 months ago.
Now that is interesting. In USA retirement ages are based on one's birth year. Born in 1956, mine is 66 years 4 months. Looks like I'll catch up here around 2022 when I turn 66. OK, good advice so far. Next question: my wife is British citizen, lived here 53 of her 55 years. She's self employed too but her business is art and some years income barely exceeds expenses. We plan to file separate SA tax returns for 2018/2019 year, in which we estimate she'll have profit of only 1,000. With the PA at what - 11,850 now? Am I correct to assume that she pays no tax until her income exceeds the PA?

Husbands an wives are entirely different persons in the UK tax system though spouses can surrender up to 10% of their PA to their other half. Your wife will pay no tax unless her income rises to the PA level. However, NI contributions kick in much lower, at GBP 6205 per annum. If income does not reach the PA level then it is a use it or loose it allowance.

Customer: replied 11 months ago.
Good to know that. Does HMRC have a tax filing status for married couples, and if so, are there substantial benefits for joint filing?

In a word no, spouses are for tax purposes entirely different persons and each must self assess unless HMRC tell them not to bother.

Customer: replied 11 months ago.
fascinating - well, at least to an American. OK. Is there a deduction here for mortgage interest or any costs associated with financing a house purchase?

None whatsoever, went over 20 years ago. Deductions as you know them from the States you can forget. About the only allowable ones for employees are pension contributions.

Customer: replied 11 months ago.
LOL. our cherished USA deductions are now at risk too. Next - I have income in the USA. Will that be taxed in the UK as well?

If you reside in the UK for over 183 days in any one tax year, 6 April to following 5 April, you are liable to UK taxation on your world wide income and will have to rely on the Double Taxation Treaty between the UK and the USA, and indeed many individual State within the Union as well, for protection.

Customer: replied 11 months ago.
I've heard of the Treaty. I will reside here for most of the tax year. The USA income consists of disability benefits and state pension. Neither is taxable in the USA and the state of North Carolina where I hold a USA address. If non taxable in USA, will that same income be taxable in UK under the Treaty?

Oh yes and as it is not taxed in the States you will receive no tax credits as a result.

Customer: replied 11 months ago.
That's not so good news. But very useful to know it now. Thanks, ***** ***** all I had tonight. Well done.

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