# A few tips/tricks on being an international in the UK



## nauru (Aug 23, 2009)

I was just thinking: I had some major headaches as an expat when living/working in the UK, so I just thought I'd post a thread with a few of the key things I learned. Hopefully these will make some members' lives slightly less frustrating.

*Banking*

The problem: As an international, you may find that it's a huge pain to get even the most basic bank account in the UK. The bank requires all sorts of papers such as local utility bills and employer paystubs before they will open a bank account for you, but the utility company and employer won't bill you or pay you unless you've provided them with a valid UK bank account in your name. It's a huge source of stress for many recent arrivals.

How to get around it: Open a bank account in the Channel Islands. Technically, a Channel Islands bank account is a UK bank account, and the account number will be accepted as 'valid UK' by whoever is asking. The account is in the local UK banking system so making transactions/transfers between mainland UK and the Islands is free -- just the same as if you had a standard HSBC or Barclays account in London. This can generally be opened through the mail, with only signed copies of your ID and a 5 page form. The key thing here is that your address can be any country in the world, and so can your employer. No utility bills required. 

Another important reason to do get a Channel Islands bank account is to ensure that as an expat, you do not pay more tax than you are legally obligated to pay. If you go on business trips, say, to the home country of your multinational employer for a common example (could be anywhere in the world though) the income you earn while on your business trip is tax free, as long as you keep the money outside the UK. So in other words, if your salary is being paid by the UK subsidiary into your London bank account, it's taxable 365 days a year; But if your salary is paid to a Channel Islands account, the you will receive a tax refund for the days you were working outside the UK. The rule is, though, you are not allowed to bring that tax free portion into mainland UK - if you do it becomes taxable. So put it in a Channel Islands high interest e-savings account, or wire it to a non-UK brokerage account. Any earnings on that money while it is abroad - either interest or capital gains - is tax free, even if you are living in the UK. This is because as an international you would qualify as a 'non-domiciled individual'. (this works only for the first 7 to 9 years you are in the UK, after which the rules are a bit different for non-doms). The rule is called Remittance Basis of Taxation.

If you are wondering which bank to go with, I've personally had good experiences with Natwest Offshore (now called Natwest International?). Very easy to open the account through the mail as an international living abroad (you could even open it from your home country so it's ready before you get to the UK), excellent service, no waiting on the phone (9-5 Mon-Fri only, no 24hr call centres for the offshore division) no minimum balance, no monthly fees, no service charges except for wire transfers and few specialty services I've never used. Your bank card will work in UK bank machines for free just like any other UK bank card. Natwest Offshore/International is very stable, wholly owned by huge UK bank Royal Bank of Scotland. Other options are HSBC, Barclays, and other huge UK banks which all have offshore divisions based in the Channel Islands. They all offer similar products and services, though some may have different minimum balances and fee levels.

*Taxation*

The problem: 99.99% of HMRC representatives apparently have little or no training on how to deal with internationals when it comes to taxes. When you ask expat-specific tax questions on their general phone line, many of the answers you receive will be half-truths, or totally inappropriate for your situation. An example of this is the apparently little-known rule I described in the banking section about income earned abroad being tax free, Remittance Basis of Taxation. Many HMRC staff seem to have no idea how it works. You can't use the online filing if you are using this rule, because the system is not designed to accomodate internationals. You must use a paper form. Also note, when sending your return to the standard address on the form you receive, if you are international there is a good chance the HMRC office will do it wrong and either underpay you or overcharge you. They did not read any of the notes I included on the form, and threw them away without reading them. A second submission to the same standard HMRC office yielded the same result. Trying to fix their mistakes through letter mail correspondence took months. I would have liked to sort it out on the phone, but the HMRC response to any thing that doesn't fit their script seems to be "write a letter".

The way to get around it: The 0.01% of HMRC staff who have proper training for international issues apparently work in a special office. After a long time trying to get knowledgeable people on the phone, I spoke to a guy who was kind enough to refer my file to the international office. From that point on, my life became easier; my tax returns were processed without errors, and refunds were promptly deposited directly to my account in the Channel Islands. I am not sure if they have a phone number directly to the international division or if this goes to a general call centre, but I will provide below the contact info which was included with my tax return.

HM Revenue & Customs
CAR PT INTERNATIONAL
RBC BOOTLE
St Johns House
Merton Road
Liverpool
L75 1BB 

+44 0151 472 6389

*Credit cards*

The problem: Without a UK credit history I found it was impossible to get a credit card the 'traditional' way, ie applying through a website or through the mail. This was despite the fact that I had excellent credit history in my home country, and solid employment, income and references in the UK. Being an international backed by a top international corporation was of no consequence to the UK credit card people. Without a UK credit history none of that matters. Also, I do not vote in foreign countries nor do I register to vote there (a personal choice, on principle) and in the UK not being registered to vote is apparently a huge black mark on your credit file.

A way to get around it: Get an American Express card in your home country, or in whatever country American Express will give you a card (hopefully you can do this immediately, so that when you leave on your trip, more than 6 months will have passed). Once you've been a good client for 6 months, Amex will give you a card based in the UK, or any country in the world where their cards are offered for that matter. They call it 'global transfer' and in my opinion it is the single most important feature which puts Amex head and shoulders above Visa or Mastercard for an expat. Neither Visa nor MC offer any sort of 'global transfer'. If I would have known this before going to the UK my life would have been simpler.

Once you have a UK based Amex, this will hopefully help you build a decent credit history in the UK so that you can obtain UK credit products the traditional way sometime in the future.

*****

This has been a very long post, but you have no idea how much time and frustration it took for me to learn these tricks. Hopefully it help some of you internationals pay no more tax than you are legally required to pay, and spend no more time on banking, tax and credit issues than is necessary. 

Before asking me about the taxation part, please read the full form of the tax code on the HMRC website, because tax rules such as Remittance Basis of Taxation and non-domicile status are laid out very clearly and in detail there.

nauru


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## Vegasgirl94 (Feb 12, 2011)

Awesome! Thanks so much for that information. I'm definitely going to take your advice about the bank AND the credit card!

Sent from my iPad using ExpatForum


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## Bevdeforges (Nov 16, 2007)

Be careful with these tips, particularly if you're an American. US citizens are liable for taxes no matter where in the world they are resident. The "fine print" of many "offshore" accounts specifically excludes US citizens or residents from opening accounts there, and in any event you still need to declare your foreign accounts to the US Treasury department each year by the end of June.

AFAIK, the Amex "global transfer" thing only works between the US and UK. When I called Amex to change my address on my move to Germany, the rep claimed they could open a German Amex account for me automatically, but it turns out it wasn't possible. 
Cheers,
Bev


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## charmingelements (Feb 13, 2011)

Bevdeforges said:


> Be careful with these tips, particularly if you're an American. US citizens are liable for taxes no matter where in the world they are resident. The "fine print" of many "offshore" accounts specifically excludes US citizens or residents from opening accounts there, and in any event you still need to declare your foreign accounts to the US Treasury department each year by the end of June.


I opened an offshore account with Lloyds TSB. It is located in the Channel Islands. As an American, I will have to report the account to the IRS along with the interest I earned (I believe...I'm dreading doing my taxes this year!). But this account was a great help. You can open it in pounds, dollars, or euros. So when I got to Scotland I already had a bank account set up for a couple months and then I had no problem opening a local Lloyds account when I got there!


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## nauru (Aug 23, 2009)

Bevdeforges said:


> Be careful with these tips, particularly if you're an American. US citizens are liable for taxes no matter where in the world they are resident. The "fine print" of many "offshore" accounts specifically excludes US citizens or residents from opening accounts there, and in any event you still need to declare your foreign accounts to the US Treasury department each year by the end of June.
> 
> AFAIK, the Amex "global transfer" thing only works between the US and UK. When I called Amex to change my address on my move to Germany, the rep claimed they could open a German Amex account for me automatically, but it turns out it wasn't possible.
> Cheers,
> Bev


For Amex global transfer I've been able to do it for Canada to UK as well, and it is also possible from Canada to US. Supposedly it works for a huge number of countries, but obviously I haven't tested them all. Too bad about US-Germany though.

Not sure why you have fine print and offshore in quotation marks. For the readers here who are US citizens then yes, you need to aware that your passport carries a lifetime tax liability unique in the world, which obliges you to report your worldwide income to the IRS even if you live outside the United States. Also note that some European banks won't do business with US citizens because US tax bureaucrats are so burdensome as to make doing business with Americans more trouble than it's worth.

For everyone else who isn't a US citizen (and wasn't born/raised in the UK), and who is living or planning on living in the UK, then these tips do apply to you. By all means be extra careful and read the whole UK tax code yourself, starting at the remittance basis section. I've done it, and I've obtained the refund myself; it's perfectly legal. This is part of the reason the UK is considered by some to be a tax haven. You can own a business abroad -- such as a multibillion dollar nickel mining company in Russia -- and as long as your salary and capital gains are kept outside the UK, you can live in a luxury flat in Mayfair and legally not pay a dime of income tax to the UK government for the first 7 to 9 years you are there (pay for living expenses by gradually depleting a cash hoard you brought into the UK when you arrived). Even if you are not a Russian oligarch, but rather an internationally mobile working stiff like most of us here, you can still keep more of your money by paying close attention to this part of UK tax law.

In North America there is a public perception that offshore bank accounts are for only for super rich criminals and spies. But actually in the UK offshore accounts are totally normal and many average middle class people have them. Due to the way the UK tax law is structured it's essential for many to have an offshore account in order to legally pay the correct amount of tax under the law; and also due to the presence of the Channel Islands in the UK bank clearing system and the availability of offshore accounts with leading global banks such as HSBC, Barclays, RBS and subsidiaries, it's costless and convenient to have an offshore account -- sometimes easier and of higher quality than the onshore offerings of the very same company.


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## InspectorClusoe (Dec 18, 2010)

If it is so hard for foreigners to get a bank account why are there often (big ) adverts in papers such as the sun saying ' are you a foreign resident coming to the uk to work. open a bank account with us! I never see any of that in france. If you walk into a branch of a main bank in te UK and you look like you have a bit of money (and you have a cheque from your employer in your hand)you will have a bank account no problem. And of course they want a utility bill. They want proof that you live in the uk. How most people get round this if they are foreign or dont have a bank account is to live with a friend (and offer to have the bill made out in their name) The fact that you dont write the cheque (as you dont at this stage havea cheque book does not matter) And regarding the credit cards, They don't throw them around to English people either. They tend to wait a few months and then offer you one if you ' have been good' . Regarding tax offices i don't know. These call center people don't really know anything except how to transfer information which is usually wrong or in the wrong context. But it is a good idea to report any earnings or even the fact that you have arrived in the uk, it is very important to show that you came to the uk to work and made an effort to declare yourself. by a recorded delivery letter. You will be forgivent for not declaring to the correct department in the UK. Deliberately not declaring for avoidance is where you will suffer. It is better to let them decide what taxes you will pay and at the same time keep money saved up for an u nexpected demand.


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## nauru (Aug 23, 2009)

InspectorClusoe said:


> If it is so hard for foreigners to get a bank account why are there often (big ) adverts in papers such as the sun saying ' are you a foreign resident coming to the uk to work. open a bank account with us!


I'm not sure, I wouldn't read the Sun. Indeed there are some accounts onshore which are supposedly designed for foreigners (passport account at HSBC, for example) but these typically carry monthly fees plus service charges, justified by the bank's claim that they are providing some kind of special service by opening an account for you (they're not).



InspectorClusoe said:


> I never see any of that in france. If you walk into a branch of a main bank in te UK and you look like you have a bit of money (and you have a cheque from your employer in your hand)you will have a bank account no problem.


Many UK employers don't pay you with a physical cheque. Particularly some major universities and multinational companies. They will only pay you by direct deposit to a bank account. I have been through this, and so have all my expat colleagues and friends in the UK. Since you are born in the UK, have you actually experienced this personally as an international moving to the UK for the first time? With no local friends when you get there to help you lie to a utility company? My post is based on my own and many others' real and frustrating experiences with the UK system. You, on the other hand, appear to be speculating.



InspectorClusoe said:


> And of course they want a utility bill. They want proof that you live in the uk.


Funny, I've opened bank accounts in many different countries in the past without ever needing to provide a utility bill. The UK is the only one which asks for this. All others accept some other documentation to show where you live, such as official letters, bank statements, credit card statements, etc to ensure that people who don't pay for their own utilities (or live in a place where utilities are included in the rent) are not caught in a catch22.



InspectorClusoe said:


> How most people get round this if they are foreign or dont have a bank account is to live with a friend (and offer to have the bill made out in their name) The fact that you dont write the cheque (as you dont at this stage havea cheque book does not matter)


What about the huge number of expats who arrive without a local friend they know well enough to ask to live with them? Or without knowing anyone local at all when they first get there? Do they not need bank accounts?



InspectorClusoe said:


> And regarding the credit cards, They don't throw them around to English people either. They tend to wait a few months and then offer you one if you ' have been good' .


Again I'm not sure what you are basing your claims on. I've actually been through this, solid income, perfect repayment history and even after 2 years could not get a credit card the traditional way. By that time the exercise was academic anyway to since most credit card I already had an Amex card via global transfer, and a visa from my bank who gave it to me the instant I opened the account with them -- they told me it was simply because the bank (one of the largest in the UK) liked to stay in the good graces of the firm I was working for. But I found it ... disappointing ... that after being a good resident and taxpayer with a credit file for all that time, that the system still couldn't handle an international's credit card application. My original post is designed for those who don't work for a "favoured multinational" allowing them to get credit cards with generous limits without having any credit history via "corporate relationships".



InspectorClusoe said:


> Regarding tax offices i don't know. These call center people don't really know anything except how to transfer information which is usually wrong or in the wrong context. But it is a good idea to report any earnings or even the fact that you have arrived in the uk, it is very important to show that you came to the uk to work and made an effort to declare yourself. by a recorded delivery letter. You will be forgivent for not declaring to the correct department in the UK. Deliberately not declaring for avoidance is where you will suffer. It is better to let them decide what taxes you will pay and at the same time keep money saved up for an u nexpected demand.


In my experience as an international in the UK I think it important to NOT trust the decision of HMRC on how much tax you should pay. They are human, they make mistakes, and coincidentally those mistakes seem to generally result in you paying more than you are legally required to pay under the law. The most important thing is to understand the rules, check HMRC's math, and to be persistent when you are sure you are right. Don't accept their numbers until you've verified their calculations yourself. I am roughly 10,000 pounds better off today because I paid attention to the rules and caught HMRC each time they screwed up. It pains me to see other expats ignore the rules, because giving extra money to HMRC is like flushing it down the toilet. (Or perhaps worse since that cash will be used to hire more government bureaucrats to try to run your life. But I digress... :focus


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## nauru (Aug 23, 2009)

charmingelements said:


> I opened an offshore account with Lloyds TSB. It is located in the Channel Islands. As an American, I will have to report the account to the IRS along with the interest I earned (I believe...I'm dreading doing my taxes this year!). But this account was a great help. You can open it in pounds, dollars, or euros. So when I got to Scotland I already had a bank account set up for a couple months and then I had no problem opening a local Lloyds account when I got there!


Good, exactly the right thing to do. When ready please post back here with your experience of Lloyds offshore regarding service, fees, ease of opening from abroad, etc . I haven't done business with them before.

On the IRS tax form is there a place where you specifically declare offshore accounts? Most countries tax returns I've done simply ask for your worldwide income -- an aggregate of all sources including foreign businesses, weekend jobs, income from hobbies, interest on all bank deposits including those held in foreign countries. I've never seen a tax return ask for a declaration of offshore accounts, only a declaration that your representation of your total income (and in some cases assets) is in fact true.


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## charmingelements (Feb 13, 2011)

nauru said:


> Good, exactly the right thing to do. When ready please post back here with your experience of Lloyds offshore regarding service, fees, ease of opening from abroad, etc . I haven't done business with them before.
> 
> On the IRS tax form is there a place where you specifically declare offshore accounts? Most countries tax returns I've done simply ask for your worldwide income -- an aggregate of all sources including foreign businesses, weekend jobs, income from hobbies, interest on all bank deposits including those held in foreign countries. I've never seen a tax return ask for a declaration of offshore accounts, only a declaration that your representation of your total income (and in some cases assets) is in fact true.


Based on some preliminary research I have been told there is a separate tax form to declare your offshore accounts. I plan on doing my taxes sometime within the next few weeks so I haven't looked over the information but I can follow up later.

I've already been with Lloyds since I believe June 2010. They were super easy to open up with - I just filled out an application online. I believe I might have had to send them something like a copy of a US bank statement to show I had funds and maybe a certified copy of my driver's license (I apologise but I just don't remember). It says what you need on the application.

I actually had no fees opening the account. This stays this way as long as you have a balance over a certain amount. They mailed me a bank card and cheque book so I was all set. The only problem is if you have trouble with them, you have to call the Channel Islands. The main frustration I had was when I needed to change the address on the account I had to mail in a form to the Channel Islands and couldn't just do it at a local Lloyds. It's like they're affiliated but not entirely so local Lloyds aren't the same as offshore Lloyds international.

EDIT - also this might have made it easier for me but I already had my money in pounds and just wired it to my new account from my old one. I'd opened one with a local investment company, put my money in, and had them convert it and then when my Lloyds account was ready I just transferred it for a small fee.


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## Bevdeforges (Nov 16, 2007)

nauru said:


> On the IRS tax form is there a place where you specifically declare offshore accounts? Most countries tax returns I've done simply ask for your worldwide income -- an aggregate of all sources including foreign businesses, weekend jobs, income from hobbies, interest on all bank deposits including those held in foreign countries. I've never seen a tax return ask for a declaration of offshore accounts, only a declaration that your representation of your total income (and in some cases assets) is in fact true.


Your international experience seems to be limited to the UK. For US citizens (or green card holders) there is a separate form, available on the IRS website, but which must be submitted separately to the Treasury Department, for reporting overseas bank accounts in some considerable detail. They ask for names of the financial institutions, account numbers, any joint tenants in the account and the highest balance during the year. You're expected to report bank accounts, investment accounts and any other sort of financial instrument in which you hold a financial interest or over which you have signature authority. (So I have to report the company accounts I have signature authority over unless my employer does a filing with the US Treasury Department for the accounts and notifies me it has done so.)

France also requires their taxpayers (French nationals or no) to submit a list of their foreign bank and investment accounts plus a list of all foreign "life insurance" (the French notion of life insurance being somewhat different from the US notion of the same). (France, by the way, requires at least as much documentation to open a bank account as you say they do in the UK, including three months' back pay slips.)

Other European countries I've dealt with for taxes don't require listing of worldwide income, only that which is subject to local taxation. But all European governments (and the US) have certainly cracked down hard on offshore accounts within the last few years. The US can and does ask foreign banks for lists of US "persons" (i.e. anyone with potential US tax liability) who are account holders. It's one reason some offshore banks won't open an account for a US citizen or resident, and I notice more of the offshore banks are excluding French residents these days.
Cheers,
Bev


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## nauru (Aug 23, 2009)

Bevdeforges said:


> Your international experience seems to be limited to the UK. For US citizens (or green card holders) there is a separate form, available on the IRS website, but which must be submitted separately to the Treasury Department, for reporting overseas bank accounts in some considerable detail. They ask for names of the financial institutions, account numbers, any joint tenants in the account and the highest balance during the year. You're expected to report bank accounts, investment accounts and any other sort of financial instrument in which you hold a financial interest or over which you have signature authority. (So I have to report the company accounts I have signature authority over unless my employer does a filing with the US Treasury Department for the accounts and notifies me it has done so.)
> 
> France also requires their taxpayers (French nationals or no) to submit a list of their foreign bank and investment accounts plus a list of all foreign "life insurance" (the French notion of life insurance being somewhat different from the US notion of the same). (France, by the way, requires at least as much documentation to open a bank account as you say they do in the UK, including three months' back pay slips.)
> 
> ...


Why do you say my international experience seems limited to the UK? It isn't. However I haven't ever needed to file a tax return myself for the IRS, since I'm not a US citizen, so I don't claim to know the ins and outs of filing a US tax return. What I do know, is that the other countries where I've filed tax returns (including some in Europe) did not ask for specific details about offshore accounts -- only a truthful statement about taxable income and/or assets from all sources. I acknowledge that some countries may ask for details, but still, as long as you tell the truth about it there is nothing wrong with having an offshore account (in most jurisdictions anyway).

Anyway, I think what you mean to say is that many western governments have cracked down on tax evasion in the last few years, and part of this renewed effort to stamp out tax evasion involves increased attention paid to offshore accounts. As I said, there is nothing inherently "illegal" or "shady" about offshore bank accounts. Only falsifying your tax return may be illegal.


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