Isle of Man Resident contracting in UK

**cojak** · 26 September 2010, 10:18

Congrats, this could well be a unique post.

Provided you keep your residency in the IoM and commute to your contract, I would imagine you can legitimately fill yer boots.

But I'm sure some proper accountancy types will be able to give you proper info.

**BolshieBastard** · 26 September 2010, 11:34

Originally posted by cssmonauts View Post

Hello, Guys, Gals & Gurus

I've just joined up, having just secured a nice contract in the UK. A great site, have been up since 5am trawling through trying to find an answer to my particular issues (and Googling, obv) but to no avail. I'm hoping that someone here can help a confused newbie...

As the title says, I live on the Isle of Man, having come here 2 years ago for permanent role with an e-gaming company. I am an IOM resident, my house, family, bank accounts are all here, and I pay IOM tax. I even have a nice letter from HMRC stating that they weren't going to be interested anymore since I moved here.

My new contract is in the UK. Having read innumerable threads regarding LTDCO / UMBRELLA / COMPOSITE and the *great* schemes run out of IOM, none seem to cover my angle. Does anyone have a view on how I can maximise my income ? Does anyone here have similar experience?

Many thanks in advance!

Originally posted by cojak View Post

Congrats, this could well be a unique post.

Provided you keep your residency in the IoM and commute to your contract, I would imagine you can legitimately fill yer boots.

But I'm sure some proper accountancy types will be able to give you proper info.

No I dont think the OP will be able to 'fill his boots'!

AFAIA, all he'll be entitled to is lower taxes due in the IoM. If he registers a UK ltd co, Im pretty certain he'll be liable for UK company taxes even though he's an IoM resident.

I think the only benefit he'll see is no threat of iR35 and lower IoM taxes if he organises himself there. I dont think a reverse of the MTM scheme will work either for obvious reasons!

**cssmonauts** · 26 September 2010, 12:05

Thanks for the contributions so far guys - nice to be unique!

I will be travelling & staying in the UK during the week, home at weekends. I've seen some things that say that if I work more the 180 days I might have to pay UK tax, so not sure. I guess an IOM accountant is my best bet given the circumstance. I will arrange to see one this week, and I will post what I find on here just on the off-chance it helps someone else

Does anyone know if IOM LTD CO's are acceptable to agencies / employers? I can't see any reason why not?

**Brussels Slumdog** · 26 September 2010, 12:38

Originally posted by cssmonauts View Post

Hello, Guys, Gals & Gurus

I even have a nice letter from HMRC stating that they weren't going to be interested anymore since I moved here.

Many thanks in advance!

You received a nice letter because

You left the UK to work abroad full-time, therefore you became a non resident and non ordinarily resident in the UK

Once you start working back in the UK then the following rule will apply

Your absence and employment from the UK did not cover a complete tax year (that is 6 April to 5 April) therefore the following rule applies ie You worked a couple of days

If spent more than 183 days in the UK during the tax year
or your visits to the UK average 91 days or more a tax year over a maximum of four years
Then welcome back to being a UK resident and can we have the tax on your world wide income.

The IOM is for the Idle rich or people working locally and not really ideal for IT contractors plus
IOM is not in the EU
My recommendation

Work in Switzerland where the tax rate is about 20% or a East European country where there is a flat rate tax

**Brussels Slumdog** · 26 September 2010, 12:40

Originally posted by cssmonauts View Post

Thanks for the contributions so far guys - nice to be unique!

I will be travelling & staying in the UK during the week, home at weekends. I've seen some things that say that if I work more the 180 days I might have to pay UK tax, so not sure. I guess an IOM accountant is my best bet given the circumstance. I will arrange to see one this week, and I will post what I find on here just on the off-chance it helps someone else

Does anyone know if IOM LTD CO's are acceptable to agencies / employers? I can't see any reason why not?

Normally not but let us know if you succeed as you are actually an IOM resident

**cssmonauts** · 26 September 2010, 13:34

Originally posted by Brussels Slumdog View Post

You received a nice letter because

You left the UK to work abroad full-time, therefore you became a non resident and non ordinarily resident in the UK

Once you start working back in the UK then the following rule will apply

Your absence and employment from the UK did not cover a complete tax year (that is 6 April to 5 April) therefore the following rule applies ie You worked a couple of days

If spent more than 183 days in the UK during the tax year
or your visits to the UK average 91 days or more a tax year over a maximum of four years
Then welcome back to being a UK resident and can we have the tax on your world wide income.

The IOM is for the Idle rich or people working locally and not really ideal for IT contractors plus
IOM is not in the EU
My recommendation

Work in Switzerland where the tax rate is about 20% or a East European country where there is a flat rate tax

Yes, if this is the case then a UK LTD CO might be best.... certainly cheaper than setting up an IOM LTD CO.

IOM actually is a great place to live and that's why I continue to live there... I'm not looking to relocate. Plus, as you say, it's not part of the EU

As both the Agency & the Company knew I am IOM resident beofre giving me the job, I would certainly push the issue as hard as I can, but if HMRC are going to want their pound of flesh, there's probably no point, just go for a UK LTD and have done with it. Thanks for your thoughts!

**Wanderer** · 26 September 2010, 16:35

Originally posted by cssmonauts View Post

Yes, if this is the case then a UK LTD CO might be best.... certainly cheaper than setting up an IOM LTD CO.

If the agencies won't deal with an IOM company (and I understand that most won't). could you set up a UK LTD and subcontract the work to your IOM LTD and then pay IOM taxes that way? (Presuming you are non-resident in the UK for tax purposes)

UK LTD makes no profit so no tax to pay in the UK and you can take advantage of the IOM tax laws.

**alreadypacked** · 26 September 2010, 17:08

Originally posted by cssmonauts View Post

Hello, Guys, Gals & Gurus

I've just joined up, having just secured a nice contract in the UK. A great site, have been up since 5am trawling through trying to find an answer to my particular issues (and Googling, obv) but to no avail. I'm hoping that someone here can help a confused newbie...

As the title says, I live on the Isle of Man, having come here 2 years ago for permanent role with an e-gaming company. I am an IOM resident, my house, family, bank accounts are all here, and I pay IOM tax. I even have a nice letter from HMRC stating that they weren't going to be interested anymore since I moved here.

My new contract is in the UK. Having read innumerable threads regarding LTDCO / UMBRELLA / COMPOSITE and the *great* schemes run out of IOM, none seem to cover my angle. Does anyone have a view on how I can maximise my income ? Does anyone here have similar experience?

Many thanks in advance!

Sorry cssmonauts, but Brussels Slumdog is correct you are not a non resident yet!
You need to stay out and earn your living outside the UK for 4 years. The non-dom stuff is not easy.
If you plan was workable everyone would do it. It may work for a short time, so good luck with it.

**DeludedAussie** · 26 September 2010, 17:08

Originally posted by Wanderer View Post

If the agencies won't deal with an IOM company (and I understand that most won't). could you set up a UK LTD and subcontract the work to your IOM LTD and then pay IOM taxes that way? (Presuming you are non-resident in the UK for tax purposes)

UK LTD makes no profit so no tax to pay in the UK and you can take advantage of the IOM tax laws.

This is exactly what I was thinking - Only downside is £1000 in accountant fees but apart from that nothing else

And you might be able to claim expenses twice

Isle of Man Resident contracting in UK