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I am moving to the UK for the long term and starting a new job from October, 2021. I would be on vacation for the most of October and my German employer would be paying out at the end of the month.

I understand that I have to pay taxes from UK income in the UK. And I have to pay direct taxes from Germany income in Germany and indirect taxes (progression proviso) for UK income in Germany.

Since I would be employed in Germany and the UK for few days simultaneously:

  1. Would UK HMRC tax my October salary from German employer?
  2. Would Germany Finanzamt tax my October salary from UK employer directly?

Update: I got the following reply from Germany Tax consultant:

if you are resident in the UK from October, you will have to file a tax return in Germany in 2022, the UK salary will be taxed indirectly (progression proviso) if you pay tax on it in the UK. this should not be a problem for the German tax office

As far as my understanding goes, I will become ordinary resident and the UK tax resident as I take long term employment in the UK. If I join the UK employer in October, my German employment salary may be subject to terminal leave pay taxes in the UK.(Section 10.7 page 59 at Residence, domicile and the remittance basis HMRC)

Last Update: I decided to negotiate my last day in such a way that I do not have 2 formal employment contract at the same time. My friend pointed me towards an important agreement clause which prohibit formal employment at 2 places at same time.

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  • Are you worried about the fact that you would be physically present in the UK a few days ahead of taking up your new job? Formally under contract from two employers during the same month? In practice, for a regular monthly salary, you may be overthinking this.
    – Relaxed
    Commented Aug 3, 2021 at 9:17
  • Also what do you mean with “indirect taxes”? Income tax not colected through the PAYE system?
    – Relaxed
    Commented Aug 3, 2021 at 9:20
  • I am worried about formally under contract from two employers during the same month. Indirect taxes (progression proviso) is specific to Germany. I want to know how UK HMRC tax my October salary from German employer.
    – tourist
    Commented Aug 3, 2021 at 10:29
  • I may be overthinking but l do not want to mess with legal or tax system of 2 different countries. This is not the battle that I want to fight. So it is much better to ask than commit a mistake.
    – tourist
    Commented Aug 3, 2021 at 10:31

1 Answer 1

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You will have to fill out your tax forms for jan 1st to dec 31st 2021 in Germany. You have to tell them any income that would be taxable if you made the money in Germany and can make any deductions that would be legal if they were in Germany, that is used to calculate your tax percentage. And the income and deductions that actually happened in Germany, that is used how many euros you pay in German taxes.

The UK has a different tax year from early April to end of March. And they may want your world wide income and subtract the taxes paid in Germany - that would be tax paid during the UK tax year.

In practice if you start employment, your UK employer may fill out your taxes exactly as they would for a UK school leaver, and nobody will complain if you stay in the UK long term.

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