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Taxes and Nepalese Expats: Understanding Your Tax Obligations When Living in the UK

13 Mar 2024


If you live in the UK as a Nepalese expat, you must understand the UK's tax system. The UK is a center of attention for many expats for its high living opportunities. Moving to the UK can be exciting and adventurous. It may open a door for you to explore the opportunities and help your loved ones by making online money transfer from UK to Nepal. But everything comes with some struggles because the UK has strict tax policies.
 

The UK has a slightly different tax system for expats; expats worldwide are taxed based on income. Almost 696,000 people from different nations are living in the UK. Everyone living in the UK has to pay several types of taxes. These taxes include residency tax, income tax, and national taxes. You have to pay these taxes once a year.
 

You must pay VAT (Value Added Tax) other than yearly taxes. It is a tax that is imposed on goods and imported products. Even your shopping and grocery items include a small amount of tax. So, you need to plan your budget carefully to pay timely taxes. In this article, you will explore different types of taxes imposed on expats and tax-free items to save your money:

Types of Taxes for Expat Living in the UK.    

Following are certain types of taxes that will help you understand the UK tax system so you can carefully manage your finances and send money to Nepal from UK. One of the most important types is income tax, the most significant income source. In 2023, its value was increased to 246.8 billion.   

Income Tax

In the UK, income taxes are exposed to you if you stay for more than 183 days. That means you have to pay a specific amount of tax from your income based on your average income. The basic income rate in the UK is 20%, for which your earnings should vary between £12,571 and £50,270. If your income is more than £50,270, you will be taxed 40% of your income. To know more about UK’s Tax System, read how to file taxes in the United Kingdom.  

National Insurance Tax

Everyone living in the UK must pay national and healthcare taxes. It also depends upon your income; a specific percentage is deducted from your salary yearly. The money from the insurance tax is used for treating people's healthcare needs.

Value Added Tax  

VAT is one of the UK's largest income sources. It was introduced in 1973, and a maximum of 20% VAT is applied to goods and services. Every time you buy goods from a seller, you must pay VAT, which is added to the product's price. The seller then submits that tax to the government.   

Residency Tax

If you are a Nepalese expat, you must stay updated about residency tax policies so you can timely pay your residence tax. You need to create ways to save more and send money online to Nepal from  UK. Residency tax is applied to individuals who stay in the UK for more than 183 days or own personal spaces in the UK.   

Corporation Tax

Corporation tax is applied to all companies in the UK. Corporation tax is applied to you only if you have your own company in the UK and it makes more than £250,000 profit. But if the company makes less than £250,000, you may be given Marginal relief.    

VED (Vehicle Excise Test)

If you live in the UK and own your vehicle, VED is applied to you. You have to pay your vehicle tax yearly. The amount of VED depends on the type and cost of your vehicle.  

Tax Relief For Nepalese Expats in the UK  

As an expat, you can enjoy some relief in your taxes and look for ways to send money from UK to Nepal. Following are the ways to save yourself from taxes.   

Personal Allowance

You will be given tax relief if you earn up to £12,570 because the UK allows you to save your income for your personal allowances.   

Double Taxation Agreement

As a Nepalese expat, you can benefit from a double taxation agreement between Nepal and the UK. Both countries have signed a treaty according to which you do not need to pay taxes in both countries.  

Temporary Working Relief

If you work in the UK as a temporary expat, you can enjoy living without paying any taxes on income. You will be deported based on the duration of your stay. 

Entrepreneur Tax Relief

For the expats who are self-employed or run their own business, the UK government charges no taxes on them. You can run your small business in the UK without paying taxes by claiming tax relief.  

Tax-Free Trips

If you live in the UK for the first time, no taxes will be imposed on your international home flights. You can visit your home without noticing the number of trips just by paying a tax-free flight fare.  

Tax-Free Savings

Another thing you can enjoy the advantage of is savings. In the UK, you can save money without paying taxes. It will help you to save more and send money to Nepal online from the UK. Individual saving accounts are typically free of tax.  

As an expat, you must stay updated about all the taxes before moving to a country. Most individuals plan their budget according to their expenses so they can spend a hassle-free month. Adding a portion of taxes to your monthly budget plan is better. Try to save more for emergencies and look for ways to earn more. Starting a self-business in the UK can be convenient because it gives you relief to earn more and make money transfer from UK to Nepal. Paying taxes on time is crucial to living a peaceful life.   

Stay Ahead: Avoid UK Tax Penalties with Timely Payments

Always make up your mind and stay updated about tax systems. The UK follows strict tax policies. If you do not pay tax for more than 15 days, 2% of the total amount will be increased as a fine. So, it's mandatory to follow the timely deadlines. Moreover, not paying taxes will result in taking charge of your possessions. Always stay alert about tax policies and make claims for tax relief. 
 

As a Nepalese expat, you may worry about spending a lot of money on your taxes. You can save yourself from paying double taxes in both countries. You will be charged a specific percentage by observing your income, which is the income tax. Furthermore, residency tax and national health insurance taxes are compulsory to stay in the UK. Everyone living in the UK has to pay taxes for their healthcare yearly.
 

Also, VAT is added to your daily life, meaning if you buy any goods or services, you must pay the seller tax, which will be further submitted to the government. Most of the UK economy is dependent on tax systems. So, always pay your taxes on time to enjoy your stay in the UK while helping your people by making online money transfer from UK to Nepal.

FAQs

How does ACE Money Transfer support money transfer to Nepal?

ACE Money Transfer supports low-fee money transactions to Nepal from the UK at a reasonable exchange rate. It is one of the fastest ways of transferring remittance from the UK to Nepal.

How do you find eligibility for the UK tax system?

You need to consult tax experts or advisors to determine your eligibility. You can also visit the HMRC website for detailed guidance.

How do you minimize the tax as an expat?

As an expat, your taxes are dependent upon your income. You can minimize taxes by running your business and claiming entrepreneur relief. Moreover, you can also enjoy tax-free savings and temporary working relief.

What is a double taxation agreement?

The double taxation agreement is a treaty signed between Nepal and the UK for the expats. According to this agreement, expats don't need to pay taxes in either country. Depending upon the situation, an individual will pay taxes in his homeland or the UK.

How do you access tax relief?

If you claim your tax relief, you must file a self-assessment tax relief from the HMRC. You can check your tax relief eligibility online on government websites.


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