Non-UK passport holder contracting in UK, non-domicile?

[electronicfur]

I am Dutch, living in the UK and about to contract in the UK. Someone told me that this meant I could take advantage of non-domicile status, and that this would be beneficial tax-wise.

Did a search on the forums and found the following:

http://forums.contractoruk.com/73521-post11.html

The thing about being a foreigner working in the UK, as opposed to a Brit working elsewhere, is that the UK and Ireland alone have the non-dom rules.

As a foreigner working in the UK, you can legitimately avoid tax on money earnt whilst working in the UK provided that the money remains outside the UK all the time.

Could someone explain to me if this is correct and how it would work.

Cheers,
EF

[SueEllen]

I suggest you look at Dutch tax law on how they tax you if you work in another country and claim to be resident in the Netherlands.

[Keldin]

For the money to stay outside the UK you would not be able to use any of it to live off while you are here. It would have to be paid into an offshore account and never be brought into the UK. Most likely it would be transferred to the Netherlands later but I don't know what would happen to it there tax-wise.
Unless you have money here to live off I'm not sure how you would manage to not need it.

I was technically a non-domicile in my last permanent job despite having lived in the UK for over 5 years and owning my house here (well the bank says I can say its mine). My salary was still taxed as it was paid here but I was allowed to have an offshore pension (it wasn't worth me doing that) and my bonus could be paid offshore (but then I wouldn't have been able to spend it unless I left the country)

If you're working here to send money back home I would suggest speaking to an accountant to clear up the details but I would imagine you'll pay tax somewhere else if not here.

K

[electronicfur]

Thanks for the info.

It sounds like I need to investigate it more. I dont need all the money I will earn whilst contracting as I have no mortgage and live below my means. So I guess non-domicile status may be advantageous for me.

Does anyone know if the non-domicile status then means my ltd company through which I contract can still be based in the UK?

Cheers,
EF

[pateen]

I too would be interested as I am a non UK citizen

[tim123]

OK,

As a (UK resident) non dom, you should be taxed on all income sourced in the UK and all other income, not sourced in the UK, that you bring into the UK to live off.

As a contractor, billing say 1000 GBP per week, I suspect that you will have no need to bring in any extra money to live off and thus will only need to be taxed on UK sourced income.

The problem that you have to solve, is how to make some of that 1000 GBP that you 'earn' whilst in the UK look like it was sourced elsewhere.

I don't actually know the answer to this, but I guess that it is possible.

Your non dom status will not affect the Company's status. Your residency, which by definition of the problem is the UK, will do this.

HTH

tim