nabs1027

This is the topic I have been dreading even to think about and that is why I have not taken any action on this yet but my situation is that I moved to UAE in December 2020 and have been working here since.

I understand that since I have lived in the UK till November 2020, I would not be classified as Non-Resident for the tax year 2020/21 and I would have to pay taxes on my UAE earnings up until 5th April 2021. I want to get advice on how you guys have managed to sort out the taxes. I dont know any financial advisors as I never needed their services before and would appreciate if anyone can help in this regard.

scrubbedexpat141

**** that. Why would you pay tax on your earnings here? Have you moved back?

nabs1027

No, I am still in the UAE.
But because I have lived about 8 months (more than 183 days) in the UK in the tax year 2020/21, I will be classified as a UK resident and would have to pay taxes on my foreign income?

Millhouse

Probably the opposite, you might even get a credit.

Fill in the P85

nabs1027

Wow.....seriously, I will be on the moon if that is the case

nabs1027

Is filling out the P85 straight forward?
I would still need to do a self-assessment because I have rental income from the house in UK. Again any tax/financial advisor contacts?

Millhouse

Have you looked at the form?

TopNik

Hello nabs1027,

If you are filing a self assessment tax return you do not submit form P85 to HMRC as it all takes place via your tax return submission.

Also, you cannot use HMRC's system to file your tax return as it is for use by UK residents only, it does not have the necessary schedules that must be submitted when UK Non-Resident.

With regards to the 2020/21 tax year, it will be a split year meaning that your UK employment income will be taxable but your UAE employment income will not be.

nabs1027

Hello TopNik
Thanks for your message.
So, what you are saying is that I dont need to fill in form P85 which sounds great.
But you have also mentioned that I cannot use HMRC's system to file tax returns. Its not clear to me, so then how do I fill in my tax returns or carry out self assessment if I am not using HMRC's system?
Thanks

Millhouse

You have two choices:

1/ Pay someone who makes it sound complicated to do it for you, or
2/ Use TaxCalc (google it)

You do file online, you just need to use a third party software.

TopNik

Hello nabs1027,

Yes, form P85 is only submitted if you are not filing a self assessment tax return which you will be.

HMRC's system is designed for UK residents only so you can either post a paper return to HMRC with the necessary schedules (deadline 31st October for a paper submission) or use third party software.

Please be advised that the area of Residence IS complex and is very important that it is handled correctly. ​​​​On the face of it the form appears simple but tax legislation is ever-changing, HMRC's literature on this is in excess of 100 pages for a reason and what I can tell you from experience is that not ONE of my clients who previously did the tax return themselves did it correctly.

Just because a tax return is given a submission receipt issued by HMRC in no way means the tax return is correct and if found not to be will be investigated further down the line.

Many feel the consequences of this at a later stage, sometimes years later!

Djuro

nabs1027,

read the above several times and remember it. Just some things to think about - do you have spouse/kids and where are they, have you left a house behind that you are not renting out..things like these all may or may not matter.

I would advise you to find a good UK tax specialist and get them to help you out, rather than do it all yourself. Like TopNik I have seen countless people take it lightly and then get hit with a back taxes bill with interest years later.