Taxes and financial planning tend to be right at the bottom of the list for people planning a relocation to London. Just because you’re moving to London does not mean that you’re somehow magically exempt from paying tax. Tax issues for expats can be complicated and you now fall under two tax authorities instead of just one.
It is vital that you find out about any tax implications from your new employer as well as your local tax authority back home, or you may end up paying double taxes when you do not have to. It is always best to get a financial advisor to look at your individual situation before your relocation to London. Choose a firm that has experience, not only in international tax laws, but in the tax laws that are specific to expats.
If you have been seconded to London by your employer they will organize your work permit and visas, as well as some temporary accommodation for you while you get settled; very few give you tax advice. Be warned.
In the United Kingdom taxation and tax revenue collection are governed by Her Majesty’s Revenue and Customs. The tax year is much like the American one: It runs from April 6 of one year until April 6 of the next. The date that you arrive in London will be an important part of your next tax return. If, for example you arrive in October 2011, you will have to fill in a return for the five months leading up to April 6 2012.
Before you pay tax you have to get a National Insurance number. Your NI number works in the same way that a Social Security number does in the USA. It is a personal number that is used to record all tax payments and contributions paid on your behalf to the government.
Relocation is a big step, but with a little forward planning, good financial advice and some on the ground help from one of the professional relocation services companies, you can find a rental property, open a bank account and learn how to use the tube in a matter of days. After that, you have to relax, get into the vibe and explore your new home town.