Working Overeas and UK Tax Liabilities (= HMRC Greed)

[Ignis Fatuus]

I don't want to come back to the UK - the house is up for sale and I want out?
...had enough of bank-rolling the rest of the world.

Defence? What defence?
Education - parents paid for mine - and I paid for all professional qualifications. I have no children.
Police/ Fire - Council Tax (and I've actually over-paid and am having exceptional difficulty getting it back)

Sorry. I thought when you said

I would not be coming back to the UK until completion of my contract.

that meant that you would be coming back after completion of your contract.

BTW not liking the services that you pay tax for, does not get you out of paying the tax, not in any country I know of. Nor does having no children get you out of paying tax that goes to pay for education. Etc etc, not the real point anyway. The real point is: just go, really go for good, and you will not be resident any more. But if you go, while keeping one foot here, you will be.


You also said

HMRC have said that because I'm British and have relatives in Britain I'm described as "Resident"

AIUI this is not so. Being British does not make you resident. Having relatives in Britain does not make you resident.

Having your centre of economic activity in Britain does, so make sure that you can not be taken to have kept this. Make sure that you have unequivocally left for good.

As for the tax year in which you leave, in principle you could be taken as resident for that year, but in practice if you send the P85 and make it clear from the start that you are gone permanently, they will put you down as nonresident pro rate the time you are away.

[george99]

When you leave you fill out this form:

www.hmrc.gov.uk/cnr/p85.pdf

If you don't return there won't be tax to pay, I presume. The prerequisite is that you intend to stay at least a full tax year out of the UK.

Cheers - I'll keep this in mind.

I'm looking to get shot of the UK as soon as I can sell the house - once that is done I'll be off. Thanks for the info.

[Gonzo]

HMRC seem to be grasping at straws to get money out of me when I'm not in the UK not using UK services?

Anyone know any way around this - the job isn't worth doing for the risks and hardship involved (for me) if I have to pay tax on this. It is the lowest daily rate I've accepted as a Project Manager?

Unfortunately, it is not so easy to shake off your UK tax residency.

If you are classed as resident in the UK then HMRC will demand tax on your worldwide income. The only way out of this is to leave permanently (P85 and stay away for one complete tax year).

I left the UK in the 2008/2009 tax year and HMRC still require me to send them a self-assessment tax return. I don't owe them anything because I have left permanently but they are still keeping an eye on me.

[configman]

But will you go running to the British Embassy if heaven forbid things go to tulip?

I understand your point but if Britain stopped allowing ICT's undercutting our value in the UK then there might not be so many expats and we are not in the UK claiming benefits but got off our backsides. It is also the expat community that promotes the UK as a highly skilled workforce that can bring work back to the UK. We also provide valuable local contacts to British companies who want to do business - I am regurarly contacted via linkedin for this. My current Chinese company is investing heavily in the UK influenced by its expats. When things went tulip during the volcanic cloud last year and thousands of British were left stranded in China and Hong Kong it was the British expat community who went to help the UK citizens so if things went wrong for us it would be nice if you helped us though I don't expect it as a right. There are benefits both ways.

[BlasterBates]

When you leave you fill out this form:

www.hmrc.gov.uk/cnr/p85.pdf

If you don't return there won't be tax to pay, I presume. The prerequisite is that you intend to stay at least a full tax year out of the UK.

[Vallah]

Looks like I'm going to have to turn down a 12 month contract - described as Tax Free (which it is in Qatar) because HMRC have said that because I'm British and have relatives in Britain I'm described as "Resident" and will be liable for full UK taxes on any money earned abroad?

The contract was 12months and I was to be employed by a foreign company based in Qatar, paid in local currency, into a local bank account and I would not be coming back to the UK until completion of my contract.

The document HMRC have quoted is HMRC6 page 6 para 2.4.

HMRC seem to be grasping at straws to get money out of me when I'm not in the UK not using UK services?

Anyone know any way around this - the job isn't worth doing for the risks and hardship involved (for me) if I have to pay tax on this. It is the lowest daily rate I've accepted as a Project Manager?

My non-expert advice would be this:

While you're away, don't pay any UK tax on your earnings. If HMRC claim that you're still resident, then your only argument is that you don't intend to return to the UK. The only way to actually prove this is not to return to the UK. If you do return within the time limit then you can expect to have to pay over the tax on your earnings (plus penalties and interest I assume). If you don't return, then you're OK. I went through exactly the same thing when I moved to the IOM 5 years ago and the above worked for me.

Again though, the above is only through personal experience and not qualified tax advice.

[george99]

But will you go running to the British Embassy if heaven forbid things go to tulip?

Take a look at recent - say past three years of news stories - the fact is that the British Embassy don't do jack tulip when things go wrong - and perhaps (if it did) then the hundreds of thousand plus I've paid for the past 25 years will count? (just the last four years of tax deductions came to £124,000)?

[SimonMac]

I don't want to come back to the UK - the house is up for sale and I want out?
...had enough of bank-rolling the rest of the world.

Defence? What defence?
Education - parents paid for mine - and I paid for all professional qualifications. I have no children.
Police/ Fire - Council Tax (and I've actually over-paid and am having exceptional difficulty getting it back)

But will you go running to the British Embassy if heaven forbid things go to tulip?

[BlasterBates]

If you leave and don't return then it is a different matter. I'm British and have British relatives but I don't pay tax. I think there is a form a you fill out and then you're non-resident. Of course if you come back then they'll probably get snotty about the time you were away.

[Fred Bloggs]

I have been in the same situation. HMRC are now getting very strict on the taxation of overseas workers still regarded as tax resident here. You basically will have to cut all ties with the UK on a permanent basis to be sure 100% that you will not be taxed by the UK.

[george99]

Arguably you are using them. If you expect to come back to the UK after a relatively short trip away, you are using all the public services that keep the UK what it is, which is most of them. Defence obviously; but education too, because it is what makes us civilised; police and fire because although you might not personally need them while you are away, the country would be different without them; and so on.

I don't want to come back to the UK - the house is up for sale and I want out?
...had enough of bank-rolling the rest of the world.

Defence? What defence?
Education - parents paid for mine - and I paid for all professional qualifications. I have no children.
Police/ Fire - Council Tax (and I've actually over-paid and am having exceptional difficulty getting it back)

[Ignis Fatuus]

...
HMRC seem to be grasping at straws to get money out of me when I'm not in the UK not using UK services?
...

Arguably you are using them. If you expect to come back to the UK after a relatively short trip away, you are using all the public services that keep the UK what it is, which is most of them. Defence obviously; but education too, because it is what makes us civilised; police and fire because although you might not personally need them while you are away, the country would be different without them; and so on.

[Clare@InTouch]

The dates you're leaving are against you really as you won't be gone for a whole tax year and you won't lose your residency for either this tax year or the next. Can you extend the contract so that you're away for a full tax year?

From the booklet HMRC6:

2.4 Residence – Tax treatment for years of arrival and departure
from the UK
Strictly, you are taxed as a UK resident for the whole of any tax year when
you are resident here for any part of it. But, if you leave or come to the UK
part way through a tax year, the year may, by concession (Extra Statutory
Concession A11) be split. This means that the UK tax you should pay
because you are resident here is calculated on the basis of the period you are
living here rather than for the whole of that tax year. This has the same
effect as splitting the tax year into resident and not resident periods.
This split year treatment will apply to individuals who:
• come to the UK to take up permanent residence or to stay for at least two
years, or
• leave the UK to become permanently resident abroad or, subject to certain
conditions, leave the UK for full-time service under a contract of
employment.

[george99]

Looks like I'm going to have to turn down a 12 month contract - described as Tax Free (which it is in Qatar) because HMRC have said that because I'm British and have relatives in Britain I'm described as "Resident" and will be liable for full UK taxes on any money earned abroad?

The contract was 12months and I was to be employed by a foreign company based in Qatar, paid in local currency, into a local bank account and I would not be coming back to the UK until completion of my contract.

The document HMRC have quoted is HMRC6 page 6 para 2.4.

HMRC seem to be grasping at straws to get money out of me when I'm not in the UK not using UK services?

Anyone know any way around this - the job isn't worth doing for the risks and hardship involved (for me) if I have to pay tax on this. It is the lowest daily rate I've accepted as a Project Manager?