Working in the middle east ,tax issues

[Fred Bloggs]

Maybe I have mis understood the OP but from how I read his post he left the UK last tax year (2016/17) so he may or may not have been able to claim split year treatment from the day he left last tax year to ensure his overseas income wasn't subject to UK tax - if he is working full time overseas in 2017/18 for the whole tax year he would likely have qualified for split year treatment.

If he is working full time overseas in 2017/18 or doesn't spend more than 16 days in the UK during 2017/18 then again he is likely to be non resident in the UK for tax purposes based on the limited information available.

If the OP is only working overseas for 6 months then returning to the UK he will probably remain tax resident throughout, although a long holiday abroad can sometimes be cheaper than paying the UK tax that would become due.

As I think everyone agrees, this can be a very complex area to advise on as there are a large number of factors to consider and can even depend on future actions of a following tax year so professional advice is always recommend. There is no way proper advice could be given on a forum, just general pointers and that's why advice on non residency is often reasonable costly (although for the tax normally at stake it's relatively cheap!).

Martin
Contratax Ltd

I agree with you. Though with a copy of RDR3 in front of me and a copy of TaxCalc Personal edition, I worked through a similar situation for myself about two months ago. Took me a couple of hours. For a relatively simple expat case like this, following the HMRC guides isn't really that difficult in my experience. I certainly worked it all out OK, I had all the information to hand. Though, as you say, professional assistance can be sought if required.

[ContrataxLtd]

The prerequisite condition is that you are out of the UK a FULL tax year before you can claim non tax resident status. In the year of departure and year of arrival in the UK you an claim split year treatment. But, again, you MUST have been out of the UK for a FULL tax year to qualify. As the OP has only been away six months (if I read correctly) then it is impossible for him to pass any of the automatic overseas tests. I suggest to begin with the OP uses the HMRC on line tool which determines if you are non tax resident or not. As it stands, I see no hope for the OP avoiding UK tax on his earnings.

Maybe I have mis understood the OP but from how I read his post he left the UK last tax year (2016/17) so he may or may not have been able to claim split year treatment from the day he left last tax year to ensure his overseas income wasn't subject to UK tax - if he is working full time overseas in 2017/18 for the whole tax year he would likely have qualified for split year treatment.

If he is working full time overseas in 2017/18 or doesn't spend more than 16 days in the UK during 2017/18 then again he is likely to be non resident in the UK for tax purposes based on the limited information available.

If the OP is only working overseas for 6 months then returning to the UK he will probably remain tax resident throughout, although a long holiday abroad can sometimes be cheaper than paying the UK tax that would become due.

As I think everyone agrees, this can be a very complex area to advise on as there are a large number of factors to consider and can even depend on future actions of a following tax year so professional advice is always recommend. There is no way proper advice could be given on a forum, just general pointers and that's why advice on non residency is often reasonable costly (although for the tax normally at stake it's relatively cheap!).

Martin
Contratax Ltd

[Fred Bloggs]

I have worked in the Middle East, broadly speaking to be non resident you will need to be or have the intention to be out of the UK for a full tax year i.e. 6 April -5 April. Provided that you satisfy the test and then you limit your visits to the UK to less than 90 days per year, i think you should be ok.

It is now much more complex to calculate, but in essence that remains mainly true. You now have to allow for such things as number ties to the UK, family ties, residential ties, work ties, etc...... It is all quite complex but the HMRC guides are very good.

[Fred Bloggs]

Make sure you have notified HMRC that you left, otherwise they will be hounding you for a tax return.

I presume you refer to P85? The system has now changed. If you fill in a self assessment tax return (most of us here do) then you do NOT send off a P85. You report your tax status on the normal self assessment form and you fill in a supplementary form to claim split year treatment in the year of departure, if you qualify for it.

[Fred Bloggs]

As others have said you do need professional advice here. As a very general rule, if you are in the UK for less than 16 days in a whole tax year you will be classed as non resident under the first automatic overseas test but you need a good review of your situation to ensure you do things correctly.

Google RDR3 and have a long read for a good place to start.

Martin
Contratax Ltd

The prerequisite condition is that you are out of the UK a FULL tax year before you can claim non tax resident status. In the year of departure and year of arrival in the UK you an claim split year treatment. But, again, you MUST have been out of the UK for a FULL tax year to qualify. As the OP has only been away six months (if I read correctly) then it is impossible for him to pass any of the automatic overseas tests. I suggest to begin with the OP uses the HMRC on line tool which determines if you are non tax resident or not. As it stands, I see no hope for the OP avoiding UK tax on his earnings.

[BlasterBates]

Make sure you have notified HMRC that you left, otherwise they will be hounding you for a tax return.

[dotcom12]

I have worked in the Middle East, broadly speaking to be non resident you will need to be or have the intention to be out of the UK for a full tax year i.e. 6 April -5 April. Provided that you satisfy the test and then you limit your visits to the UK to less than 90 days per year, i think you should be ok.

[BlasterBates]

Hi new member,

Has anyone on here worked in the middle east and had any tax problems when returning to the UK? I was under the impression when i came out here 6months ago as long as didn't return to the UK for more than 16 days i would be ok.
The HMRC website is very difficult to understand, so was just wondering if anybody on here could steer me in the right direction or even an accountant that could help?

Thanks in advance

You should deregister. From what I see you do qualify as non-resident:

you work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working

https://www.gov.uk/tax-right-retire-abroad-return-to-uk

If you rent or own a property and return to it regularly there is a possibility you might be resident. As others have said I would take advice if you're not sure.

[ContrataxLtd]

Hi new member,

Has anyone on here worked in the middle east and had any tax problems when returning to the UK? I was under the impression when i came out here 6months ago as long as didn't return to the UK for more than 16 days i would be ok.
The HMRC website is very difficult to understand, so was just wondering if anybody on here could steer me in the right direction or even an accountant that could help?

Thanks in advance

As others have said you do need professional advice here. As a very general rule, if you are in the UK for less than 16 days in a whole tax year you will be classed as non resident under the first automatic overseas test but you need a good review of your situation to ensure you do things correctly.

Google RDR3 and have a long read for a good place to start.

Martin
Contratax Ltd

[Fred Bloggs]

Hi new member,

Has anyone on here worked in the middle east and had any tax problems when returning to the UK? I was under the impression when i came out here 6months ago as long as didn't return to the UK for more than 16 days i would be ok.
The HMRC website is very difficult to understand, so was just wondering if anybody on here could steer me in the right direction or even an accountant that could help?

Thanks in advance

Wrong. Unless you achieve non resident status you pay UK tax on your worldwide earnings. Anyone who tells you different is not telling you the whole truth. Look at the HMRC guidelines, they are very clear and easy to understand.

[craigy1874]

16 days?

Hi new member,

Has anyone on here worked in the middle east and had any tax problems when returning to the UK? I was under the impression when i came out here 6months ago as long as didn't return to the UK for more than 16 days i would be ok.
The HMRC website is very difficult to understand, so was just wondering if anybody on here could steer me in the right direction or even an accountant that could help?

Thanks in advance

If you are UK resident you are taxable on your worldwide income unless you establish non UK residence.

You won't do that in 6-months on its own. It is a complicated situation to understand, so you should speak to a tax advisor.

[SCOTLAD]

Hi new member,

Has anyone on here worked in the middle east and had any tax problems when returning to the UK? I was under the impression when i came out here 6months ago as long as didn't return to the UK for more than 16 days i would be ok.
The HMRC website is very difficult to understand, so was just wondering if anybody on here could steer me in the right direction or even an accountant that could help?

Thanks in advance