How is it paid?

How is NHS paid for by US expats as u do not pay UK taxes at least for the first few years?
Thanks
John

How is NHS paid for by US expats as u do not pay UK taxes at least for the first few years?
Thanks
John

I'm not sure why you think expats don't pay taxes. If you work in the UK, you're paying taxes.

I sure as heck pay the taxes!

OK now I am really confused.  Everything I have read so far says I do not pay UK taxes for first 5 yrs and I do not pay US taxes up to $80k but owe beyond that, where am I wrong and specifics please. Understand I pay council taxes and the like.
Thanks
John

Where have you read that?

Like Geetak said... I sure as heck pay taxes!! From day one even!

OK now I am really confused.  Everything I have read so far says I do not pay UK taxes for first 5 yrs and I do not pay US taxes up to $80k but owe beyond that, where am I wrong and specifics please. Understand I pay council taxes and the like.
Thanks
John

The UK and USA have a double tax treaty, so if you are paying UK taxes, you don't have to pay US taxes (up to $80k).  So, if you aren't (for some weird reason unknown to me) going to have to pay UK taxes, you will then have to pay US taxes.
There's no win in the situation...like the saying goes, two things are certain: death and taxes! 

P.S. I really don't know where you got the information about not paying UK taxes for five years, but it doesn't seem right to me.

WOAH...  There are some mis-conceptions going on here...

First, the $80,000 foreign earned income credit for US taxes has nothing to do with the tax treaty.  Anyone who does not reside in the US can deduct up to $80,000 per year from their worldwide earnings.  The US will and forever tax US citizens on their worldwide income.  Depending on your US permanent residence status you maybe taxed for 10 years after your departure from the US.  In order to qualify for it, a person has to be a bona fide resident of a foreign country and "work" in the US for essentially a 12 month period.  Once the 12 month period is met, the portion of the US tax year that applies can be deducted.  Other deductions can also be applied, but everyone is different in that case.  Generally speaking if you don't make over $80K a year, your federal tax burden will be nothing.  You may still be liable for State taxes.  Each state is different and you need to check this out.

The treaty comes into play in government retirement and pension schemes.  Basically you can get credit for your US government retirement and visa versa with the UK.

The UK will only tax you on your UK remitted earnings.  You must pay UK Inland Revenue taxes on any earnings remitted (brought into) the UK.  What is remitted and what isn't can be a somewhat sticky issue, but for most people it would be what you earn while working in the UK.

Now those who are resident in the UK but not ordinarily resident and those who are temporarily resident (planning to spend less then 3 or less then 5 years in certain cases) have certain UK deductions available to them (like travel expenses to and from work) etc that can greatly reduce their UK tax burden.  As to when you become resident in the UK, we recently discussed in the Taxes board here.  I would recommend everyone take a look there.

But as for NHS... We have talked about this before in here as well.  There are those who pay taxes, of which a portion goes to fund the NHS payments, and then there are those who are entitled to not have to pay for NHS care.  Basically the public funds are paid to those who provide NHS services.  Anyone who is legally resident in the UK for greater then six months is entitled to have their NHS services paid the moment they enter the country.

ARRRRRGGGGGGHHHHHH! So, I sign a contract at 90K quid a year (I am told about 150K USD) are you saying I will pay income taxes on all of the 90K quid in the UK AND US Federal Tax on the 70K USD over the 80k US tax credit?!!!If sSo, I will end up making no more - and probabaly less - for a multinational corporate job of much greater responsibility in the UK?  I have talked to people who have lived there and seen websites that say how you ALWAYS pay less in taxes and make out likie a bandit living overseas but you are telling me, in fact, my standard of living will likely decrease?  Any recommend a good tax advisor/accountamt? Did I also read here that you need one in the US AND another in UK? I searched this site for info on paying for NHS and tax liabilities and found nothing.
Thanks for any help
John

You definitely don't ALWAYS pay less in taxes or make out like a bandit at all!  I don't know why people would say that unless they're just underreporting to the IRS how much they're making overseas?  Or potentially they are living in a country where you get paid more but things cost a lot less.  I don't know how/where you live now but it will all depend whether or not your standard of living increases or decreases.  Mine decreased for sure. 

OK now I am really confused.  Everything I have read so far says I do not pay UK taxes for first 5 yrs and I do not pay US taxes up to $80k but owe beyond that, where am I wrong and specifics please. Understand I pay council taxes and the like.
Thanks
John

The only way you wouldn't pay UK tax is if you were paid in the USA, in US$, otherwise yes you are paying tax here.  If you are paid in the UK you will automatically have income tax & national insurance (which pays for the NHS) deducted from your pay.

You definitely don't ALWAYS pay less in taxes or make out like a bandit at all!  I don't know why people would say that unless they're just underreporting to the IRS how much they're making overseas?  Or potentially they are living in a country where you get paid more but things cost a lot less.  I don't know how/where you live now but it will all depend whether or not your standard of living increases or decreases.  Mine decreased for sure. 

Agree with Geetak!

The only way you wouldn't pay UK tax is if you were paid in the USA, in US$, otherwise yes you are paying tax here.  If you are paid in the UK you will automatically have income tax & national insurance (which pays for the NHS) deducted from your pay.

Actually, technically, if you reside in the UK, even temporarily, you are responsible to pay taxes on the amount of money you bring into the UK.  Trust me on that one!  My company spent a lot of money sorting out the taxes of me and a couple other people who spent too much time in the UK and Ireland, though being employeed and being paid out of the US in USD.

Admittedly it is harder for IR to track, but that doesn't mean you aren't supposed to be paying it.

We used to have an accountant on the forum who specialised in UK and US taxes for expats.

http://www.ht-tax.co.uk/index.html

I've never used her as I couldn't afford her services but you may find her useful.

ARRRRRGGGGGGHHHHHH! So, I sign a contract at 90K quid a year (I am told about 150K USD) are you saying I will pay income taxes on all of the 90K quid in the UK AND US Federal Tax on the 70K USD over the 80k US tax credit?!!!If sSo, I will end up making no more - and probabaly less - for a multinational corporate job of much greater responsibility in the UK?  I have talked to people who have lived there and seen websites that say how you ALWAYS pay less in taxes and make out likie a bandit living overseas but you are telling me, in fact, my standard of living will likely decrease?  Any recommend a good tax advisor/accountamt? Did I also read here that you need one in the US AND another in UK? I searched this site for info on paying for NHS and tax liabilities and found nothing.
Thanks for any help
John

You might want to post something in the Tax forum here.  We have a couple of dual US/UK tax advisors that watch that board.  Sometimes they don't watch this board.

If you 90K contract is with a US company that has sent you overseas, tax equalization packages are fairly standard.  Again, our Taxes board has some information on what is common and what to expect.

There are some (not a huge amount) of UK based US/UK Tax specialists that can deal with maximizing your deductions, etc.  Like I said before, especially if you are planning to spend < 3 years in the UK then these can be VERY beneficial.

If your current employer is paying you in Pounds and is not taking out your taxes and NI contributions you are going to have a very difficult time ahead of you.  If they are just treating you as a contractor and not an employee, then you have a lot of things to consider, including IR35 rules which may totally nail you with taxes you weren't expecting.  I could go on, but I assume you have enough heartburn already!

It is a condition of the Work Permit scheme that you pay the equivalent of UK income tax and NI...so even if you are paid overseas you get the same net pay as you would if you were a PAYE employee.


Vicky