Originally posted by skysies
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Previously on "IR35 - Switching Tax Residency Overseas But Staying With UK Client"
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Originally posted by Lance View PostAll great until the sunlit uplands when you suddenly find that you're an exporter of services to a country outside the EU.
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Originally posted by GigiBronz View PostMove to Romania(part of EEA, no VAT), corp tax is 2-3%, cost of life is 1/3 of here. Weather is nice with hot summers, snow in winters.
Mountains and seaside at 2h distance. Infrastructure is a bit poor and people are a bit difficult sometimes.
Stick to a good accountant.
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Originally posted by skysies View PostIR35 would still apply if I work for ONE client only.
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Originally posted by Jolie View PostI think you are the one misunderstood. If you pass them then you go to the UK Tests, then if you pass them you go to the Sufficient Ties Tests.
It doesn't matter about the UK or Sufficient Ties Tests, if you fail the automatic overseas tests, its game over.
If you pass, or answer YES, to the UK tests, you are considered a tax resident. One example is the question: Present in UK >183 days in the current tax year.
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Originally posted by skysies View PostSeems there's a lot of hearsay and misleading information on that forum
The 90 days refer to the Automatic Overseas Tests. If you fail them, then you go to the Automatic UK Tests and Sufficient Ties Tests.
I certainly can be here more than 90 days, and work more than 30 days and still be non-resident for tax purposes!
Originally posted by HectorYou’ll not be considered resident in the UK for the whole tax year if you do not meet any of the following:
the automatic overseas tests
the automatic UK tests
the sufficient ties test
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Originally posted by Jolie View PostNon-residency for tax requires you pass a number of tests, one of which is that you must not be in the UK more than 90 days per year, and no more than 30 of those for work purposes. If you are working on your client site for 3 days per week, then you are tax resident and IR35 applies.
The 90 days refer to the Automatic Overseas Tests. If you fail them, then you go to the Automatic UK Tests and Sufficient Ties Tests.
I certainly can be here more than 90 days, and work more than 30 days and still be non-resident for tax purposes!
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Originally posted by Jolie View PostJust to further clarify on your comment, you were referring to UK based dividends income and capital gains, which of course would come under "other" income.
I was referring to income earned abroad from the work you do for the UK client.
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Originally posted by jamesbrown View PostThe temporary non-residence rules also apply to dividends, but they apply to (dividends on) profits and (gains on) assets held prior to departure. It's also worth noting that "5 years" is a shorthand for something significantly more complex.
I was referring to income earned abroad from the work you do for the UK client.
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Originally posted by jamesbrown View PostThe temporary non-residence rules also apply to dividends, but they apply to (dividends on) profits and (gains on) assets held prior to departure. It's also worth noting that "5 years" is a shorthand for something significantly more complex.
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Originally posted by Jolie View PostCompletely agreed, but it's also possible to return within 5 years and not be liable for income earned abroad, but you would be liable for certain capital gains. This is where having a good accountant is really worth their fee.
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Originally posted by NotAllThere View PostIf you leave and all indications are you plan to leave permanently (i.e. not return within 5 years), you'll be considered non-tax resident immediately. While it's possible to do this and, e.g. rent out your house rather than selling it, the more ties you have, the more the risk of being labelled tax resident in the UK as well.
Originally posted by HectorIf you return to the UK within 5 years
You may have to pay tax on certain income or gains made while you were non-resident. This doesn’t include wages or other employment income.
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Originally posted by skysies View PostThat seems like a dodgy scheme to me. All income generated in the UK should be taxed at source, meaning in the UK. The IR35 would also appy in that case. I just can't see how the UK client will decide to put you outside of IR35, if all their other contractors are on PAYE.
If you are not tax resident in the UK and you work in the UK you are still liable for tax, and IR35 would then apply.
If you don't come to the UK to work, but your client is in the UK, then IR35 does not apply. It's simply a business to business supply from an overseas contractor to a UK company.
Non-residency for tax requires you pass a number of tests, one of which is that you must not be in the UK more than 90 days per year, and no more than 30 of those for work purposes. If you are working on your client site for 3 days per week, then you are tax resident and IR35 applies.
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Originally posted by skysies View PostThat seems like a dodgy scheme to me. All income generated in the UK should be taxed at source, meaning in the UK. The IR35 would also appy in that case. I just can't see how the UK client will decide to put you outside of IR35, if all their other contractors are on PAYE.
The fact is regardless of where you work you will be subject to tax, it is just a question of in which country. If you are not familiar with cross border working you can get into a lot of trouble. You need to be very careful if you decide to work remotely for the same client.Last edited by BlasterBates; 9 February 2020, 14:38.
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Originally posted by skysies View PostThat seems like a dodgy scheme to me. All income generated in the UK should be taxed at source, meaning in the UK. The IR35 would also appy in that case. I just can't see how the UK client will decide to put you outside of IR35, if all their other contractors are on PAYE.
The last point you make is a completely separate one and the the supply chain above you may indeed not be willing to risk that you become chargeable to UK tax at some point during the contract. It is easier for them to ignore outliers like you. FWIW, if you are regularly working from the UK or have other ties to the UK, you may well be resident for UK tax purposes, but that is the first thing to establish.
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