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Double taxation nightmare!

Double taxation nightmare!

I am a UK taxpayer, and have come to work in Germany, for an unknown period, and am registered as Self Employed in Germany. I started on 10 July 2000, for a period of 8 months. I may obtain further contract work at the same site, on a different project. I am a technical writer. I undertand that even if I pay tax in Germany, I still need to fill in UK tax returns. I will get tax credits in UK for any tax I pay in Germany, so will not have to pay it again, except make up any shortfall if the tax paid in Germany is less than what it would be in UK. My question is, what do I have to tell the UK Inland Revenue regards my work in Germany? Do I need to register as Self Employed in UK as well? Do I have to prove to this organisation that I am a self employed person, according to UK rules?
What if they say I am not really self employed, but am an employee. Who then has to pay employers NI?

As far as Germany goes, I am self employed. I have been advised to get E101 form so that I may continue to pay UK NI contributions instead of having to pay German ones.
Bob Visanji


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By Anonymous
04th Aug 2003 15:09

did you splve this?

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01st Feb 2001 20:04

I'm not going to claim to be a trans border tax expert but...
I think you may find that earnings in the other country are irrelevant for tax purposes. Not that this will do you any good, since U.K. tax rates are lower, mind. You will be treated as a seperate person in both countries for tax purposes

Don't worry about the IR trying to classify you as an employee. They often do this, as it cuts their collection costs by over 75% to collect from someone who is an employee rather than self employed, because they can use the PAYE system. Unfortunately, your employer is German so, unless they have a UK base PAYE is irrelevant. They will also wish to avoid a fight over Employer's National Insurance, since they will not benefit from it, the German Government will. If they did, your "employer" would have to pay secondary NI however.

It makes a lot of sense to pay British NIC. At £2 a week, you are probably saving your food bill every week. Stick with the E101.

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