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I was in New Zealand on a working holiday visa in early 2017 for about nine weeks - across the last few weeks I was there, I did some remote software development work for a few different clients, all located outside of New Zealand. I earnt roughly ~$800 USD gross in total for this work.

I live in the United Kingdom and continued doing freelance software development work upon returning to the UK in May as a self-employed contractor. I am having to wind up my software development work and need to sort out what tax I need to set aside for the end of the financial year.

Do I need to pay income tax on the ~$800 USD to New Zealand, or would it count as part of my UK income?

There is a double tax agreement between New Zealand and the United Kingdom, and New Zealand's IRD website states for independent contractors:

most DTAs may exempt you from income tax in New Zealand if you are in New Zealand for less than 183 days and you do not have a fixed base or permanent establishment in New Zealand.

I was only in New Zealand for ~70 days with no permanent base, so I think I am meant to pay tax only to the UK - does this sound reasonable?

  • Did you do any other paid work while you were in NZ? Did that employer deduct tax or not? – Rupert Morrish Jan 23 '18 at 19:25
  • You only pay tax in the UK. NZ is totally uninvolved with that aspect of your life. The $800 is simply part of your UK income. – Fattie Jan 24 '18 at 23:32
  • @RupertMorrish no other paid work while I was in New Zealand – James Hiew Jan 25 '18 at 1:43
  • @Fattie this is what I think now, though at the time I thought I would have to pay it to NZ as the work was done while I was there rather than in the UK, and I was on a Working Holiday Visa. – James Hiew Jan 25 '18 at 1:44
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As @Fattie says in comments, you should declare this as UK income.

Even if the IRD at some point decides you should have paid NZ tax on it (which seems extraordinarily unlikely), you can deduct what you paid Inland Revenue from any tax you owe the IRD.

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