gottheTshirt

sorry it is and it has worked for me for the past 40 years

Meow

It may be correct if you have been UK non-resident for 40 years, but is not for those who are non-resident for just a few years. You should never assume that what is correct in your situation is the same as for everyone else. That frequently leads to very misleading information being given that could have adverse monetary consequences for people.

gottheTshirt

The situation is now covered by Articles 8.5. 8.6 and 8.7 of HMRC6. I was a member of the ACE lobby committee that agreed these basic rules with Dawn Pimlico when Gordon Brown decided to abandon the 365 day rule in 1997. The agreement reached was that employees will be tax exempt from the day they leave to the day they return. HMRC has fudged the rules since then, but as I understand it the application by HMRC is still basically the same and, unless one has a vested interest, there is no need to make it any more complicated than it is. If I am wrong and there has been more recent changes then I stand to be corrected.

Bigtaff

Sorry for asking again but still not quite clear as there is conflicts but will I need to pay for my earnings from 5th Dec 2009 to March 31st 2010 or not? I'm still here in Dubai, don't intend moving back home unless I'm sent there and, if it counts for anything, I like Houmous. I filled out a P85 before I left and did a tax return for the part of the year I was home for.

Meow

I don't think you fully understand. You are treated as non-resident from day of departure, but for those who are only out of the UK for a short period, partial years may still be subject to income tax. To suggest otherwise is very misleading.

I suspect you are referencing Dawn Primarolo, who was at the treasury at that time. A woman I met, amongst other senior staff on my regular visits there from 1997 to 2004. It doesn't help your case if you don't know the right name of the relevant person.
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Meow

In brief, it depends on how long you remain non-resident. If you are non-resident for a full five tax years, then any partial years become exempt.
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kazic

I need to disagree with Meow about the 5-year story. It is necessary only to be 1 full tax year (a) abroad and (b) employed all that period in order to keep your NT status. That means, you need to return to UK after 6 Apr 2011 and keep the conditions (a) and (b) valid.

For the tax year 2009-2010 you should declare ALL your income (both in the UK and abroad) from 6 Apr 2009 till 5 Apr 2010. In addition to that, you need to send them special form called "additional Information". If I am not wrong, this form is caled SA101 or something similar. In that form, you will declare your income abroad (after Dec 2009) as non-taxable income in the UK.

This is the way how UK tax authorities work. It is not helpful to send them letters describing your case. They only understand that form called "Additional Information".

In the year 2010-2011 you MUST keep your NT status.

If you return to the UK in May 2011 you will need to make the similar tax declaration as described above. You declare all your income for the year 2011-2012. But, you also use form "Additional Information" to declare your income abroad from April till May 2011 as non-taxable in the UK.

Roadking

Nope, haven't paid any in years!

Meow

I'm afraid that various posters don't understand the difference between being UK non-resident, ordinarily non-resident and being liable for income tax on overseas earnings.

Just because you have completed P85 and have declared yourself non-resident, it does not mean you are not liable for UK income tax on overseas earnings. Other conditions must be met.

*shrugs*

Bijilo123

You do not need to be employed. I'm fairly certain that NT status has nothing to do with this either - I believe that NT is to do with UK employees who don't pay tax - which is fairly uncommon. You may mean Non Resident status but condition (a) may not exempt you from being ordinarily resident in some circumstances.

Meow is right; the differing resident statuses are subtle but they make a big difference to the tax liability. For most people who are settled away from the UK the tax status clear but for those who are not away for long - even if they are away for a tax year - they need to take good advice to understand their liabilities and what they can do to avoid tax if it is due. Taking comparison from people who have been out of the UK for long periods is dangerous.

kazic

Bijilo, the condition of employment is a MUST. The UK tax authorities want to preclude that someone loses his job abroad and simply decides to prolong his stay abroad (even without a job) until the full tax year is completed.

About tax status: We are talking about the most common case - ordinary residents in the UK who moved abroad and got NT status after sending their P85. They stay at least 1 full tax year abroad (with EMPLOYMENT) and after that, they return to the UK and become again UK ordinary resident.

I have explained the way of tax declarations for cut years (after leaving UK and before returning to UK). It should be very useful information because it is not easy to find elsewhere.

However, I have also heard about 5-year rule which Meow mentioned, but never got the explanation contradicting my previous description. The only important issue, according to my knowledge, is 1 full tax year (with conditions a and b as described in my previous post). In addition, NT status is associated with breaking all ties with the UK. Everything should be done as you are leaving UK "forever" But, it is still only for 1 full tax year. After that, you can return to UK "forever", taking new job, moving to new address (in order to avoid returning to your previous life, because of already broken ties).

That is why I would be very happy to hear contradicting opinion.