Contracting in UAE

[zilla88]

Hi all,

I potentially have a contract opportunity in the UAE and I'm trying to understand the tax implications of doing this. It will be my first time contracting abroad.

I understand that the earning while in UAE will be tax free from a UAE perspective, but I eventually will need to bring that money back in to the UK. At that point what are the tax implications? Below are some questions I have but if I'm missing something obvious then please do let me know.

1. The earnings from the contract will be in a UAE bank account. When I transfer the money to UK, will that have to be to my personal account (and therefore subject to income tax) or can be to my contracting business account and therefore subject to the normal business UK tax laws?
2. Are there other ways in which to move the money back to the UK other than transferring to personal account (as income) or contracting business bank account (company revenue).
3. The recruitment agent I spoke to said that generally contractors do one of two things. They either 1. dont tell the HMRC that they are working in UAE and just have their UK bills rerouted to their UAE account or 2. Ensure that they are working outside the UK for 270 days of the tax year and that would mean their earnings outside of the UK is exempt from UK tax. Are both these options valid? option 1 sounds very illegal.

Thanks in advance.

[sadkingbilly]

Option 2 is your friend, but be careful of the small print.
it's a rolling ratio of time outside UK vs time Inside.
been a loong time since I did it (KSA) but remember having 2weeks in Cyprus when I finished the job, to avoid UK tax.
Option1 - well, let us know how you get on with that, if you go there

as for money transfers, might as well use personal account with wise*

*other FE providers are available.

[Yuri F]

option 1 - for personal income: UK tax residency rules apply, (your accountant says 270 days but it could be less to lose UK tax domicile and get another country)
for business income - company residency/registration country (corp tax)

option 3.1 would be legal if you're not UK tax resident (personal income) for that tax period but it's in a scope of option 3.2. (depending on reasons for losing residency - more towards tax avoidance than tax planning - both are legal)
but if you are UK tax resident (personal income) and not disclose/pay tax on that income - then yes, it is illegal (tax evasion).
if it's business income (Ltd) then it's subject to corporation tax (country Ltd is registered in, if UK then HMRC corp tax rules apply).

[northernladuk]

How potential is potential? You talking you have seen a job ad you might be able to fill or do you have a client with a need and have been introduced?

[Fred Bloggs]

This is dead simple to answer. OP needs to read and understand HMRC document RDR3. There's really no need to do anything else, least of all take any notice of what's posted here other than what I just wrote. OP either does this and understands it. Or is in for a world of pain with the taxman, which would be entirely self inflicted and deserved.