Daily Archives: April 18, 2008

Taxing times

A big downside to working for Sun is that it puts me onto bog-standard PAYE for all my main income. So I lose the tax-efficiencies I’ve hitherto used, and pay income tax in a country where taxes on earned income dwarf all other taxes, so that hard workers get to pay for the idle rich (grrr) as well as for government waste and folly (grrr) and for more deserving causes.

Today i invested the annual maximum (now £3600) in a cash ISA. That’s something I’ve been doing each year since my income from WebThing grew sufficient to support it. And I’m looking at what seems to be the only other way left to avoid Very High Tax: putting a very large amount of my income into a pension.

Now a pension is only any use if it is significantly above the government’s means-tested benefits. If I’m still renting a home when I retire that’s a non-starter, because means-tested benefits that include housing costs will leave a good deal more net income than I’m accustomed to or could save for. So to save tax, I also have to buy a house. Fortunately I can combine the two, as a pension can (in part) be used to buy a house. That is, if house prices continue downwards long enough …

The other thought that someone at Apachecon mentioned … what about moving about so much that I’m not resident in any country for tax purposes? That means living in three countries, each for clearly under 6 months a year. Or something like that. For the tax saved, I could rent somewhere adequate in each of three European countries (or indeed elsewhere, though permission to live&work outside Europe would presumably be a nightmare of red tape). Sounds like a lot more faff than I want to deal with, but it’s an interesting thought …