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Another Tax Question!

Another Tax Question!

Old Apr 7th 2008, 9:55 am
  #1  
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Default Another Tax Question!

I have looked through many earlier posts and although there is a lot of useful information I don't seem to be able to find the answer.

I have recently moved to Dubai (end of march) and will be working for a branch of a UK company based here in Dubai. At present I still have a UK bank account and I am still being paid by the UK company into that account therefore paying the usual tax etc. I plan on being here for one whole tax year.

Do I need to complete the P85 form? Also, is there anyway of claiming back all the tax at the end of the tax year or does the completed P85 form mean that I will be paid tax free from the UK company into my UK bank account?

I hope the above makes some sense. Thank you in advance.
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Old Apr 7th 2008, 11:41 am
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Default Re: Another Tax Question!

You may not qualify as being non-resident for tax purposes because the beneficiary of your work is a uk company as is your contract of employment. You can get round this by getting paid by the Dubai branch of the UK company and thus be non-resident for tax purposes. If you qualify as non-resident for tax purposes then you would be paid on a nil tax basis via your payroll. That is a matter between your payroll and the revenue. You should get paid (and employed and get a contract of employment from the local branch - this is v important or you will just be there on holiday in the eyes of the UK revenue))

This is not just about where you live as no end of overseas based UK pilots or bankers living in Normandy can testify.

Filling in the form means nothing - or we would all do it - it is just evidence in support of a claim of non-residence which is not, in your case, on the info you've provided, going to be easy to assert. You should still fill it in though.
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Old Apr 7th 2008, 4:24 pm
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Default Re: Another Tax Question!

Many thanks for your response Old Lob, I appreciate it.

If I can get a contract of employment from the Dubai branch and they start paying my salary, does that mean they can just start to pay my salary tax free in Dhs into a Dubai bank account?

If I have to move back to the UK before qualifying as non-resident for tax purposes then I assume I will have a large tax bill if I transfer the money back to the UK? If I am here a whole tax year and do qualify for non-resident tax status can a take my earnings from Dubai back to the UK tax free?

Sorry for all the questions but this is all new to me!! Thanks in advance.
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Old Apr 7th 2008, 4:37 pm
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Default Re: Another Tax Question!

Yes they can pay your salary tax free into the local bank. But you need to have residency and a work permit and sponsorship. You need these to sort the Dubai end issues mainly but also if you don't then you will probably be liable for tax in UK. You need to make sure that all allowances are also paid from Dubai branch and nothing from the UK. You are restricted to visiting the UK too during the tax year - no more than 90 days.

Your second point is wrong. Technically you will owe the UK tax and NI if you finish within the tax year irrespective if you remit the money back or spend it or save it. It is unlikely that you will be able to maaintain a local bank account if you are non-resident. You sjhould not keep any money in Dubai for many reasons and I am not the expert on this (or frankly on any subject).

If you stay the tax year and you keep all of your stuff - dates, contract, payslips - any evidence then you should have really no difficulty with the inland revenue.

If your company has relocated you then you can get a way roud all of this tax blx by way of a (and for you who think I only know mass spectrometry and gas chromatography) I will introduce the new topic of the PSA - the personal settlement agreement whereby your UK employer indemnifies you against tax as a gesture towards moving you. (Your emloyer should speak to the revenue about this).This bypasses all rules known to man!! Tax Man. Woth thinking about in your rare circumstances.
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Old Apr 8th 2008, 3:44 pm
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Default Re: Another Tax Question!

Again, many thanks for your reply.

In conlcusion if I have:

a)work permit, residency, sponsorship etc
b)emplyment contract from Dubai branch
c)salary from Dubai branch into Dubai bank account in Dhs
d)spend no more than 90 days back in the UK this tax year, therefore qualify as non-resident for tax purposes
e)Keep dates, contracts, payslips........

then after the end of this tax year I should be able to move back to the UK with all my money tax free. I hope!
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