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Author Topic: British Student Loans Nightmare, Istock, and maybe even TAX! :(  (Read 7810 times)

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harry

« on: January 02, 2008, 16:23 »
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Hello everyone! Im English, with a big student loan. (Dont worry, Ill get to tax later) In England, the interest on our loans is the same as inflation, so I wanted to avoid paying it off as long as possible. I was teaching English abroad until recently, so I told the loan people about that, and they took a little out of my wage. I kept quiet about Istock (a little dodgy), although at the time I wasnt earning much. Now though, Im not teaching English anymore and Im living only on Istock. Im going to be travelling, living on tourist visas for a year, and working for Istock as I go in (many) foreign countries, starting with Japan. Innevitably, the student loans company (Da*n them) are now asking me to fill out a "student income assessment form" (cringe), so I have a few questions for anyone unfortunate enough to have been through this beaurocratic nightmare themselves!
1.How do I proove how much I earn from Istock? (People who are used to paying tax could probably answer this one).
2.As this is all supposed to be sorted out in advance, how do I do an estimate about what Im going to be getting next, and then proove it, ideally without telling them about the money Ive been earning over the past year? Can I just give the number for December times twelve?
3.Am I supposed to pay tax somewhere? Im a little confused about this, as I always thought that Im effectively working illegally on a tourist visa wherever I am, and should be paying taxes there. Or am I supposed to pay it in England, even though I havent lived in the country for a few years?

Thanks very much to anyone who has the patience to help me here- I know this is an exceptionally tedious and depressing post, and taxes and loans are the last thing any of us want to think about. Personally, if I read this post, Id be pretty irritated by now. Thanks a lot, and I appreciate any help you can give.  :)
« Last Edit: January 02, 2008, 16:24 by harry »


« Reply #1 on: January 02, 2008, 16:27 »
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You need to set your stock income up as a business (sole trader is fine) then offset your equipment depreciation and travel costs as a business expense.

Go see an accountant.

vonkara

« Reply #2 on: January 02, 2008, 16:34 »
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Hatman was quicker... nothing to say



« Last Edit: January 02, 2008, 16:38 by Vonkara »

harry

« Reply #3 on: January 02, 2008, 16:42 »
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Hatman and Vonkara, thanks very much! Would this help with the student loan nightmare, or just the tax? Does this means that I should pay tax while overseas, even if Im only in the country a couple of months a year?
Thanks again! :)

RT


« Reply #4 on: January 03, 2008, 02:22 »
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Where do you pay your money into, if it's a UK bank (after the Paypal process) and you have a UK passport I'd suggest you liable to pay UK tax.
If you haven't told the Inland Revenue that you're now living abroad they'll consider you still liable here, but as suggested set up as a sole trader, tell the Inland revenue when you want your tax year to start, you'll have to pay a class 2 NI stamp and then that's it.
As suggested by the others, go see an accountant who'll explain what to do.
Enjoy your travels.

harry

« Reply #5 on: January 03, 2008, 06:03 »
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Thanks RTimages. For the last few months its been going into a UK account (after paypal), but Ive been reading about setting up a swiss bank account and keeping it offshore. Ive been out of the country for over 6 months this tax year, and for over 90 days on average out of the last four- which I think may get me out of the tax, but Im not sure... I guess I need to see an accountant. Thanks so far for all the advice! Very kind. If there's anymore itd be great.

Could anyone tell me what document you show as evidence of your istock earnings?

« Reply #6 on: January 03, 2008, 12:35 »
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I don't know about the UK but in the US you have to pay taxes on income earned abroad and I find the discussion about swiss bank accounts distasteful. I'd suggest no one else give advise to someone looking to avoid taxes and be a bad debtor.

"There are only two certainties in life, death and taxes."

If you're willing to pay taxes l(i.e. stop your illegally activity) then the way you would prove how much you earn is to either keep the check stubs if you get checks or if you use paypal then print off your payment history on iStock. As least in the US, the only income you have to pay taxes on is the "realized" income, i.e. you are actually paid and not just money in your iStock account.

P.S. Just because your debt is indexed to inflation doesn't mean you want to put off paying it! Pay off any credit card debt you have first, but then you should pay your student debt. Remember that it is not an interest free loan and the interest compounds on the principle.

« Reply #7 on: January 03, 2008, 15:06 »
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I think this type of student loan, where you pay back through income tax, is interest free.

When I was a student in the late 80's and early 90's, I was paid a grant, there were no tuition fees, I could claim some money for rent and I could claim unemployment benefit during the summer holidays.  That has all gone now and students have to pay a lot for their education.  The money seems to have been wasted by the politicians.

I wish they had to show us what our tax is spent on.

« Reply #8 on: January 04, 2008, 11:54 »
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I think this type of student loan, where you pay back through income tax, is interest free.
Really? I'm american so this would be very new to me. Do you mean by "through income tax" that they only use income tax to pay of your loan or do they add an addition deduction from your wages (garnishment)? When I looked at the British student loan website it said that the loans did charge interest but that interest was indexed to inflation.

harry

« Reply #9 on: January 04, 2008, 12:30 »
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I don't know about the UK but in the US you have to pay taxes on income earned abroad and I find the discussion about swiss bank accounts distasteful. I'd suggest no one else give advise to someone looking to avoid taxes and be a bad debtor.

"There are only two certainties in life, death and taxes."

Thanks yingyang and sharpshot! A quick update: I have made some progress on the tax question by reading a lot of terribly dull documents on the internet, and phoning a number of official agencies here. In the process, I seem to have proved the death and taxes rule wrong :) Yipee! (Linking tax-paying to morality is proved wrong just by saying "Iraq"  ;D)

How to LEGALLY avoid tax as a British citizen by using a Swiss Bank account:

First, leave the country for at least four tax years, keeping your visits to a maximum average of 90 days at a time. Second, make sure that you are out of the country for the final tax year for at least 6 months. This will make you into a "non-resident" of the country. Third, work for companies based outside of the UK. After these simple (but somewhat time consuming) steps, you should be legally allowed to avoid paying British tax, unless you bring the money into the country, when they will want to tax you on the interest earnt over time. To avoid this, you'll need an offshore bank account. All this is legal, and saves money. (Im pretty sure that I fit into the category.) Admittedly, the country youre working in might be interested in your earnings, but this is a problem that all of us have every time we go to Thailand on a tourist visa to take photos. Im not going to worry about it.

If anyone has any advice on how to proove to the student loans people how much I make from istock, that's what Im trying to figure out now. Thanks people :)
« Last Edit: January 04, 2008, 12:32 by harry »

« Reply #10 on: January 04, 2008, 12:53 »
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I think this type of student loan, where you pay back through income tax, is interest free.

Really? I'm american so this would be very new to me. Do you mean by "through income tax" that they only use income tax to pay of your loan or do they add an addition deduction from your wages (garnishment)? When I looked at the British student loan website it said that the loans did charge interest but that interest was indexed to inflation.


I think you are right, it is the banks that will loan to students interest free, in the hope that they will stay with them.

"Another option is using an overdraft facility. Most banks will offer interest-free overdrafts on their student accounts with the hope that you will continue to use that bank once you graduate. You can only have one student account at any one time and the amount you get on an overdraft will depend on the bank. The usual amount is around 2,000 and it is interest-free."

http://learnist.org/student-loans/student-debt-consolidation.html

« Reply #11 on: January 04, 2008, 13:02 »
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Wow, almost makes me want to change citizenships, except I'd have to learn a new language (British  ;D).

As for the student loan people a print out of your payouts should work. It works for the IRS (tax collectors in the US). The other way you could use is bank account statements showing payouts from paypal, or money broker receipts. If you take payments by check, which is what I do, then you can keep the check stubs or even make copies of the check for your records.

@Sharpshot - if that's true then that's amazing. No bank in the US would ever offer such a service at such a loss with just the hope they stay with the bank. In fact, any executive at a US bank that tried to offer such a service would get fired soon afterward. I'm not saying it's a bad idea, it's just not something that would happen in the US. Instead we offer sub-prime loans to people that don't understand what they're getting into and then get into deep financial trouble.

harry

« Reply #12 on: January 04, 2008, 13:14 »
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Ah I see- Just let me check I understand. Is that the one with "Your Payout Report" at the top? The one that looks like this?:

Request Date Closed Date Status Amount Method Receipt
December 18, 2007 December 22, 2007 Closed $****.00 Paypal Get
November 21, 2007 November 27, 2007 Closed $****.00 Paypal Get
etc etc, with it going down the page?

Thats great yingyang, thanks a lot. :) My four day marathon of paperwork is at last coming to an end...


 

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