Student Tax When You’re Working Far From Home
04th July 2019
We know how it is. You’ve been officially listed as dead for 5 years, so when the Infinity Gauntlet gets snapped a second time you’ve got some serious catching up to do. You’re ready to start earning, but you’re still a student so you’re not sure you want to put on a suit and join the Avengers full-time just yet. You’ve got a summer holiday in Europe planned with your student friends, so when Nick Fury starts blowing up your voicemail, you decide to take on some work while you’re abroad. Now’s the time to start thinking about your tax situation.
Even wall-crawling, web-spinning super-students need to keep the taxman happy. In general, UK tax is handled through the Pay As You Earn (PAYE) system. That basically just means SHIELD will grab a chunk of your earnings to pay your Income Tax and National Insurance contributions before forking the rest over to you. Of course, if you’re self-employed you’ll have to handle your taxes yourself. That means signing up for the Self Assessment system and filing yearly tax returns for your income.
Suppose you team up with another freelance superhero from an alternate reality on a short-term job battling destructive Elementals across Europe. Sure – it’s a sweet side-gig in a beautiful part of the world, but HMRC’s going to be even more interested in what you’ve been up to than J. Jonah Jameson. Earning while you’re abroad doesn’t mean you’re safe from the taxman’s clutches. You’re probably still going to be classed as a UK resident for tax purposes. On top of that, it’s actually possible to get trapped paying tax in both countries at once! The UK has some “double taxation” agreements in place around the world to help stop you from losing out, but you need to be sure of your footing when you’re earning overseas. It’s definitely worth getting professional advice here. Even if you walk on walls, it can still be difficult to know where you stand.
If you’re going to be overseas for longer periods, like over a full tax year, there’s a chance your tax residency status might change. If you become a non-resident for tax, then only the money you earn in the UK will be taxed by HMRC. Again, the rules around this can get tricky, so it’s worth talking to a professional. In particular, people paying off student loans need to get their paperwork in order here. If you’re overseas with no UK income, then the Student Loans Company will take over handling your repayments instead of HMRC.
Tax Free Grants and Sponsorships
Wherever you’re going and however you’re working, it’s worth remembering that not everything you make will be taxed. That grant from the Stark Foundation, for instance, is all yours. The same goes for your Student Loan and any sponsorship cash you’re getting. You’ll still have a standard tax-free Personal-Allowance as a UK tax resident, too.
Claiming Tax Refunds
In fact, depending on your situation, you might actually end up being owed some tax back. If you’re employed by someone and travel to a temporary workplace, some of your expenses can be used to claim a yearly tax refund. We’re talking about essential costs of doing your job here. If a Fire Elemental scorches your super-suit, for example, repairing it can count as a legitimate work expense.
The same goes for things like your web shooters and other necessary tech. Transport costs, accommodation and even the food you buy when you’re travelling for work can all count toward your refund, so get in the habit of keeping receipts. If you’re self-employed, you can claim many of the essential costs of your work against your taxable profits in your Self Assessment tax returns. Either way, just be sure you understand the rules. Paying too much tax is a bad situation to be in. Getting caught paying too little can be a lot worse.
Call in the Earth's Mightiest Tax Experts
So, whether you’re fighting fiery giants in Prague or simply selling a few holiday snaps to the Daily Bugle over the summer, keep in mind that HMRC will always want to know about any cash you’ve got coming in. In the meantime, talk to RIFT about all your tax questions and problems, and assemble back here soon for more advice, updates and information from Earth’s Mightiest Tax Experts.