Isle of Man

[DaveB]

IoM isn't in the EU IIRC.

Assuming the OP is a contractor, then presumably she's going to be mostly working and staying on the mainland, which I would imagine makes things awkward.

IIRC You can stay in the UK a maximum of three months total in any 12 month period before you have to pay tax as if you were a permanant resident....

[ladymuck]

Assuming the OP is a contractor, then presumably she's going to be mostly working and staying on the mainland, which I would imagine makes things awkward.

You're quite right. I'm hoping to be classed as resident in IoM with the business based there but working wherever the job takes me. Looks like my idle musings require some of that proper advice type stuff sooner than I expected.

[DimPrawn]

I'd be interested to know anything you find out regarding becoming resident in the IoM, running an IT business there, etc.

[eternalnomad]

I had a look at this idea a few years ago and my plans were only prevented by a wife who cannot see what is happening to this once great country (perhaps its time to trade her in for a younger model)

Things i discovered at the time (and I dont know how many of these "facts" still hold true):-

1) It appeared totally legit (at the time) to reside in the IoM from a tax perspective thereby avoiding the clutches of Gaydon

2) Rule (1) only held true provided you complied with the "90 day rule" or whatver it was called i.e. you have to be on the mainland UK for less than 90 days p.a.

3) THE DAYS TRAVELLING TO AND FROM THE UK DIDNT COUNT IN THE 90 DAYS (and for a weekly commuter this made the 90 day rule easy to comply with) i.e. for me the actual counted days would only be Tues & Wed (I WFH on Fridays) = 2 days * 44 working weeks = 88 days

4) The costs of flights from IoM were cheaper than my weekly train ticket from GNER (assuming I paid there full price which I never do) and the estimated door-to-door commute much quicker than train commute

Hmmmm.......as wife is finally happy to move "Darn S'arth" I may just float the idea of IoM again.

[expat]

It is not hard to avoid being resident in the UK, if you really are only in it for 90 days or less every year (not including arrival and departure days, though that is not set in stone).

It is not hard to arrange it so that you pay tax only in the country where the income is considered to be earned, and in the country where you are resident.

It is not hard to avoid double taxation, in that you can normally offset the tax actually paid in one country against the tax due in another on the same income; with the net effect that you pay the higher of the 2 countries' rates.

But if you think IOM Co & residency will let you work in the UK without paying UK tax, I could use some of whatever you're smoking.

[DaveB]

It is not hard to avoid being resident in the UK, if you really are only in it for 90 days or less every year (not including arrival and departure days, though that is not set in stone).

It is not hard to arrange it so that you pay tax only in the country where the income is considered to be earned, and in the country where you are resident.

It is not hard to avoid double taxation, in that you can normally offset the tax actually paid in one country against the tax due in another on the same income; with the net effect that you pay the higher of the 2 countries' rates.

But if you think IOM Co & residency will let you work in the UK without paying UK tax, I could use some of whatever you're smoking.

Yes, but if you make yourself a real employee of your company, paying full salary etc rather than divies, you are an IoM resident and the client pays the company which is in the Isle of Man then your Income Tax should be covered by the IoM rules, and not UK. IoM company tax is far lower as well. Avoid getting caught by the 90 day rule and you should be fine.

IANAA, talk to yours.

[expat]

Avoid getting caught by the 90 day rule and you should be fine.

i.e. don't live or work in the UK, just visit most weekends. Yes, that would get you out of the UK tax net.

[DaveB]

i.e. don't live or work in the UK, just visit most weekends. Yes, that would get you out of the UK tax net.

Or, as eternalnomad said earlier....

3) THE DAYS TRAVELLING TO AND FROM THE UK DIDNT COUNT IN THE 90 DAYS (and for a weekly commuter this made the 90 day rule easy to comply with) i.e. for me the actual counted days would only be Tues & Wed (I WFH on Fridays) = 2 days * 44 working weeks = 88 days

[DaveB]

Out of curiosity, and to fill the time before lunch, I did a bit more digging and found this

UK Personal Taxation - Residence & Domicility
There are two main concepts which are relevant in determine a persons tax obligations in the UK. These are:

Residence, ( including Ordinarily Resident)
Domicile
Residence
Residence, is simple terms is where one lives. Determining ones residency is dependent on ones length of stay in the UK, number and frequency of trips to the UK, i.e. habitual and their intentions to stay in the UK.

Generally a person is deemed UK tax resident if, in any give tax year (being 6 April to 5 April) one:

Is present in the UK for more than 183 days, not including the day of arrival or departure. (i.e. half the year); or

Has spent an average of 90 or more days per year in the UK over the previous 4 years. This is known as ordinarily resident.

Tax tips:
Only whole days spent in the UK count towards the 90 or 183 day thresholds. The day of arrival in the UK and the day of departure are not counted as days spent in the UK.
It is possible to spend 180 days in the UK in one tax year and then another 180 days in the next tax year without being considered tax resident in the UK. However, care must be taken not to become ordinarily resident for tax in the UK.

So, it's not entirely straight forward, but it is perfectly possible to do.

[tim123]

Then again, if you are already paying tax on IoM then wasnt there a recent EU ruling saying you cannot be taxed twice?

No.

(there may be individual country to country agreements)

tim