Updated 16 February 2021 Taxation in the UK is levied in several ways. Income Tax, Capital Gains Tax and Inheritance Tax are paid to central government through Her Majesty’s Revenue and Customs Service (HMRC); Council Tax is paid to local government. Value Added Tax, which is paid at the time of purchase on goods and services, and Excise Duties on such things as petrol, alcoholic drinks and tobacco also represent central government revenue and are collected by HMRC. The sum of all these taxes will be in the range of 40-45% of total income, depending on your financial status (unless your income is too low for you to pay income tax, when it will be somewhat less). Following devolution, taxation patterns in Scotland and Wales are gradually diverging from England. For example, the Scottish tax bands are more finely graduated. Income Tax In the UK a person’s tax position is determined by reference to his/her residence and domicile status. If the HMRC classifies an individual as being resident and domiciled in the UK, then that person is assessed for income tax on his/her worldwide income and capital gains (the so-called arising basis). If on the other hand, the individual is classified as being resident but not domiciled or not ordinarily resident in this country, he/she is assessed for income tax only on income and capital gains that are remitted to this country during a financial income tax year (the so-called remittance basis). The tax year runs from 6 April to 5 April of the following year. Individuals arriving in the UK during a tax year will normally be entitled to split-year treatment (see HMRC website on residence requirements), meaning that they will be taxed only on income arising after their arrival. At present, spouses are assessed separately for tax purposes in the UK. It is important for individuals to agree their domicile and residence status with HMRC. In January 2020 HMRC updated a guidance note (RDR3) on the Statutory Residence Test, downloadable from the HMRC website (www.gov.uk). The document describes a series of ‘automatic tests’ governing tax residence in the UK or abroad. The basic rule is that individuals are treated as resident in the UK for tax purposes, unless they meet any of the automatic overseas tests, if they meet one of the automatic UK tests or the ‘sufficient ties’ test. An attempt has been made by HMRC to make the document as comprehensible as possible, and many illustrative examples are provided. In terms of domicile, persons of UK origin, even though they may have worked abroad for many years, will usually be considered as being domiciled in the UK if they intend to retire and settle in the UK.  It is recommended that you seek specialist advice from an accountant if you wish to claim non-domiciled status and reside in this country. An individual’s domicile and residence status also has a bearing on the tax treatment of the UN pension. An individual who is considered to be resident but not domiciled or not ordinarily resident in the UK will be subject to income tax only on the amount of UN pension that is remitted to the UK during a particular tax year. Domiciled residents qualify for relief on their UN system pension through the US-UK double taxation agreement (see below). Overseas health insurance premiums are not tax deductible. Pension lump sums can almost always be brought into the UK without payment of tax (see Foreign Pension Schemes December 2016); the same appears to be the case for pension fund withdrawal settlements where UN service exceeds five years. However, income derived from investing lump sums is taxable. It is possible to place some capital each year in a tax free Individual Savings Account (ISA). From 6 April 2017 the annual allowance for an individual ISA has risen to £20,000, which can be placed in a cash ‘or stocks and shares ISA or any combination of the two, each spouse qualifies for an individual ISA. Other tax-efficient investment opportunities exist, but it is advisable to consult an independent financial adviser on their usefulness in the light of individual circumstances. Individuals are responsible for filing their annual Self-Assessment Returns. If you file a paper return, it will be due by 31 October following the end of the tax year, and HMRC will inform you of the tax payable. If you file online, the deadline is 31 January following the end of the tax year, and the income tax due will be calculated automatically. Payment of any tax liability is also due on 31 January following the end of the tax year along with an advance on the first half of the estimated tax for the next tax year. HMRC imposes penalties and interest for non-compliance and late payments. Many publications previously issued by HMRC have been withdrawn but the information they contained is available on its web site. There are some documents available at tax offices or online that may be of interest and help to retired UN staff members. Apart from the Statutory Residence Test guidance note mentioned above, they include the Notes for Self-employment (SA103S or F), Income from UK Property (SA105), Foreign Income (SA106), Capital Gains (SA108), and Residence, Remittance Basis etc. (SA109). HMRC runs a self-assessment helpline on telephone number 0300 200 3310; from abroad call +44 161 931 9070. You are warned, however, that there is often a long wait to be connected and that callers are charged by the minute once connected. If you call at 8 a.m. UK time you will not have to wait long. Many organizations including Which? Money Weekly is a free online newsletter and Age UK contain useful information about tax on their websites. For those preferring hard copy, a number of tax guides are available annually. A general guide is The Good Retirement Guide published by Kogan Page (£20) although the tax treatment is fairly basic. Dedicated tax guides include the Daily Telegraph Tax Guide 2020 (£17). Income tax applies to the amount of income after deduction of personal allowances. A personal allowance gives an individual an annual amount of income free from tax. Changes in tax rates and allowances apply from the start of a tax year (6 April). Citizens Advice provides a good comparison of tax rates between the nations of the United Kingdom, which are continually evolving: 2020-2021           England, Wales & NI                                         Scotland Tax rates           Taxable income    Rate                         Taxable income     Personal all.       Up to      £12,500             0%               Up to      £12,500              0% Starter rate                                                                  £12,501 – £14,585      19% Basic      “          £12,501 – £50,000     20%           £14,586 – £25,158      20% Intermediate                                                               £25,159 – £43,430              21% Higher   “          £50,001 – £150,000   40%           £43,431 – £150,000    41% Top rate              Over £150,000        45%                   Over £150,000        46% Taxable income is established after deducting certain allowances, which for 20/21 are: Personal allowance (see table above): The personal allowance, for all ages, is reduced by £1 for every £2 of taxable income above £100,00 reaching zero at £125,000. Savings and dividends: Basic rate tax payers can receive up to £1,000 of savings income free of tax and higher rate tax payers up to £500. The tax-free dividend allowance is £2,000. Basic rate taxpayers pay 7.5% on dividends and higher rate taxpayers pay 32.5% on dividends. Savings and dividends are added to earned income and taxed last. This means that tax on these two sources is based on an individual’s highest tax band. (www.which.co.uk shows how to calculate this.) Marriage allowance:£1,250 Up to 10% of the personal allowance may be transferable between spouses or registered civil partners when one is a non-taxpayer. The marriage allowance is not available to couples entitled to the married couples allowance. Married couple’s allowance: max. £907.50 – min. £351 A married person born before 6 April 1935 may be entitled to a married couple’s allowance. Blind person’s allowance: £2,500 The United States-United Kingdom Double Taxation Agreement (DTA) NB. The BAFUNCS Discussion Group on this Subject. With effect from tax year 2017-18, the 10% tax allowance on foreign pensions has been abolished. However, as a result of a case concerning World Bank retirees in the UK and the experience of some BAFUNCS members, we can now use the DTA to claim back tax on our pensions. DTA came into force on 1 January 2004 and is known as the Double Taxation Relief (Taxes on Income) the United States of America Order 2002 Statutory instrument 2002 No 2848. The UNJSPF is considered as established in the USA for the purposes of applying the DTA, regardless of the jurisdiction in which the retiree worked. To determine any possible tax reduction, UN system retirees will need their end of service statement giving the total relative amounts paid into the “pension pot” by both the UN system and by the applicant as well as all relevant service information. If you do not have the end of service statement a similar certificate, an “Attestation of Contributory Service and Contributions”, can be obtained from UNJSPF which provides the following information: name of participant, contributory service, date from which retirement benefit has been received, total of participant’s and organization’s contributions. HMRC now considers  that the total of  a staff member’s contributions, plus the contributions of the employing agency, form a “pension pot” which is exempt from UK income tax. This means that a deduction can be made from the gross annual pension received from the Pension Fund and a lower amount reported to HMRC up to the point where the pension pot is exhausted. The period over which this tax-free deduction is applicable varies between 13 and 34 years and depends among other things on the age at retirement of the staff member and of her/his spouse (if any) and on the proportion of the lump sum taken (if any); it begins on the date of retirement. Thus, the application of the DTA is of greater benefit to those who retired recently, especially because the resulting tax rebate will be offset against the  10% foreign pension relief which was previously available. However, for some pensioners, the tax-free deduction will extend many years into the future. Most people have employed an accountant familiar with the US tax system to make the necessary calculations and deal with HMRC but this should only be necessary on an initial one-off basis; and at least one member has done it herself. HMRC has informed regional tax offices of the new arrangements and up to now nobody has reported any difficulties.  It should be borne in mind that HMRC has 12 months from the date of submission to question a claim. Be sure to visit the Website Discussion on this Subject, where members are sharing their practical experience of making this relatively new tax policy work for them National Insurance Individuals with earned income from self-employment, for example from consultancies, must pay national insurance contributions at the self-employed rate if they are under UK pensionable age (currently 66) and where their annual income from self-employment exceeds £6,475. The self-employed (Class 2) rate for the tax year 2020/2021 is £3.05 per week. In addition, net income between £9,501 and £50,000 per year is subject to the Class 4 contribution rate of 9%. 0ver £50,000 p.a  the rate is 2%. Stamp Duty Land Tax (SDLT) Although stamp duty payments on the first £500,000 of property are suspended at the time of writing, those intending to purchase property in  England and Northern Ireland will normally have to pay SDLT. Each rate of duty applies to the whole price once thresholds have been passed. For freehold residential purchases and new residential leasehold properties, the rates are: Property cost up to £125,000 :  zero Property cost between £125,001 and £250,000  :  2 percent Property cost between £250,001 and £925,000  :  5 percent Property cost between £925,001 and £1,500,000 :  10 percent Property cost over £1,500,000 : 12 percent Removable fixtures and fittings are not subject to stamp duty. If you intend that your home will be a second home then the above amounts are increased by 3%. Different systems apply to both Scotland and Wales (Transaction Tax). First-time buyers paying £300,000 or less for a residential property will pay no Stamp Duty Land Tax.  First-time buyers paying between £300,000 and £500,000 will pay SDLT at 5% on the amount of the purchase price in excess of £300,001. First-time buyers purchasing property for more than £500,000 will not be entitled to any relief and will pay SDLT at the normal rate. A first-time buyer is defined as an individual who has never owned an interest in a residential property in the United Kingdom or anywhere else in the world and who intends to occupy the property as a main residence. Capital Gains Tax (CGT) Chargeable gains made by an individual, resident in the UK, must be shown on the annual Self-Assessment Return. Capital gains which in aggregate total less than the annual exemption (£12,300 per individual in the 2020/21 tax year) are free of CGT. Gains above this limit are taxed at a rate depending on the individual’s taxable income. Higher rates apply to properties other than one’s main residence, which is exempt from CGT. Husbands and wives are each entitled to their own annual exemption, on gains made in their name as individuals or on jointly owned investments. Individuals who are resident and domiciled in the UK are subject to CGT on all worldwide gains on an arising basis. From 6 April 2015, non-resident individuals disposing of UK residential property are also subject to a capital gains tax charge. Any gains on selling a stocks and shares ISA (see above) are not subject to CGT. Inheritance Tax (IHT) Transfers between spouses (in lifetime or upon death) are not subject to IHT, providing both spouses are domiciled in the UK. Otherwise, IHT is charged at a flat rate of 40% on residual estates valued in excess of the present exemption threshold of £325,000. Properties with a value of up to £1,000,000 will not be subject to IHT. Spouses are entitled to roll over any unused IHT allowance upon death, such that the surviving spouse may leave up to the joint limit of £650,000 free of IHT if none of the allowance has been used previously. The first £3,000 of gifts made each tax year by each individual is also exempt from IHT and any gifts under £250 are exempt from this limit. People who leave 10% or more of their net estate to charity can choose to pay a reduced rate of IHT of 36%. An individual who was resident and domiciled in the UK is likely to be subject to IHT on the value of his/her worldwide estate. The same applies to an individual who, while not domiciled in the UK, has nevertheless been resident in the UK for 17 out of the past 20 years. There are ways of minimizing the amount of IHT due through the establishment of trusts, etc. but specialist advice is essential to ensure that the correct options are chosen and that the relevant restrictions concerning asset disposal are appropriate. Council Tax Council tax is payable to local authorities on the assessed value of a property.  The rate varies from one authority to another. The assessed values are classified in bands that have little relation to present-day house prices since assessments were carried out in 1991 for England and Scotland and in 2003 for Wales. The bands for Scotland and Wales are different, while Northern Ireland has another system. All are listed in detail in www.which.co.uk. The bands for England are:     A   up to £40,000   B   £41,001 to £52,000   C   £52,001 to £68,000   D   £68,001 to £88,000   E   £88,001 to £120,000   F   £120,001 to £160,000   G   £160,001 to £320,000   H   over £320,000   Council Tax is paid in full if two or more persons are living in the property, but is reduced to 75% of the full rate if only one person is in residence. The tax covers, among other things, the cost of police, fire authorities, parish councils, libraries and adult social care. Vehicle Tax Rates The rate of car tax is based on the date the car was first registered and the amount of CO2 the car produces. After the first year, a standard rate applies. For cars registered on or after 1 April 2017, petrol and diesel car owners pay £150 p.a; for alternative-fuel cars such as hybrids the cost is £140 p.a.  Zero-emission cars such as electric vehicles are exempt from car tax. If your car cost more than £40,000 when bought new, you have to pay an extra £325 per year for five years. Zero-emission car owners are exempt from this rule. Value Added Tax (VAT) Value Added Tax (VAT) is levied on most goods and services at a standard rate of 20%, although some items such as domestic fuels (gas, electricity, heating oil etc.), energy-saving materials and security goods are taxed at only 5%, and others such as most food items, books and children’s clothing are zero-rated or exempted altogether. Insurance premium tax on most policies is also charged at 12%; although 20% is levied on some insurance such as travel or mechanical or electrical appliances. Excise Duties Fuel duty is currently about 58p per litre (less on LPG and Biogas).  In January 2021 petrol cost on average £1.20 and diesel £1.23 per litre. Excise duty on whisky and on cigarettes is approx. 70%. The air passenger duty standard rate is currently £26 per passenger for flights up to 2000 miles (£13 for the lowest class of travel); for longer hauls £180 from April 2021 (£82 for the lowest class).  Children under 2 years old are exempt; children under 16 flying economy class are also exempt. In 2018 a “sugar tax” was introduced on soft drinks with the aim of reducing childhood obesity.      

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  17 February 2021 Dear Colleagues, Last month, WHO issued a call to all countries to work together in solidarity to ensure that within the first 100 days of the year, the vaccination of health workers and older people was underway in all countries. Health and care workers have been at the forefront of the pandemic response: often under protected and over exposed.  All of us have been touched in some way by the loving care of a health worker – their presence at a birth, a death, treatment for a child, sibling or parent. Although vaccines are now being distributed in more than 70 countries, with health workers in those places rightly among the first groups to receive them, in most low- and middle-income countries, vaccination has not even started, which is a catastrophe as hospitals fill up. We must act swiftly to correct this injustice. Multiple variants are showing increased transmissibility and even resistance to the health tools needed to tackle this virus. In this light, during the International Year of the Health and Care Worker, I am asking you to support the rollout of the Vaccine Equity campaign to ensure that by World Health Day on 7 April 2021 that COVID-19 vaccines are being administered in every country, as a symbol of hope for overcoming both the pandemic and the inequalities that lie at the root of so many global health challenges. You can help by inviting your networks to sign up to the Vaccine Equity Declaration and spreading word on your social media channels using materials that can be found here (https://www.who.int/campaigns/annual-theme/year-of-health-and-care-workers-2021/vaccine-equity-declaration). Thank you for joining the global call to act together for Vaccine Equity and protect those who protect us. Proud To Be WHO Dr Tedros, WHO Director-General