UK Income Tax
#91
Account Closed
Joined: Jul 2007
Posts: 7,028
Re: Summary
I am moving to Abudhabi to work on 4/4/2008 and from this forum and speaking with HMRC I have concluded the following:
(1)- To get real benefit of Tax free salary you have to work for atleast 1 Tax year. i.e. if from 6th of April to 5th of April of following year. but if you start lets say in November of 2008 then you have to work till 5th of April of 2010 to be classified as full tax year.
(2)- you must not spend more than 90 days on average over 4 years in UK
(3)- Complete P85 form from HMRC "Leaving the United Kingdom", available from HMRC website before you leave UK.
(4)- Your salary could be paid tax free into your UK account altough you may wana get paid in UAE to avoid tax on interest from your savings. You can have UK bank account in Jersey which will have UK sort code and account number and set up direct debits to pay you bills, loans, mortgages in UK. Most high street banks such as Barclays, NatWest etc do them.
(5) - Its cheaper to get paid in £ in UAE account and then transfer money to UK or Jearsey off shore account, as Transfers cost 50AED with most UAE banks (£7.5 approx) as compared to get paid in uk or offshore account and then transfer to UAE , usually £25-£30.
(6) If you own a house in UK and renting it out via agent or directly then complete "Overseas Landlord Form" from HMRC to get rent Gross (before tax) and register for "Self Assessment" with HMRC and you will at the end of tax year receive SA forms. If the property is jointly owned then both of you will have to SA.
(7) remember your Mortgage Interest you pay, agents fees, insurances and maintenance costs, Council Tax payable can be deducted from the tax able rent. Also if thats the only form of earning you have then you also have £5250 tax allowance (2007-2008) before you pay basic rate of tax @10%
(1)- To get real benefit of Tax free salary you have to work for atleast 1 Tax year. i.e. if from 6th of April to 5th of April of following year. but if you start lets say in November of 2008 then you have to work till 5th of April of 2010 to be classified as full tax year.
(2)- you must not spend more than 90 days on average over 4 years in UK
(3)- Complete P85 form from HMRC "Leaving the United Kingdom", available from HMRC website before you leave UK.
(4)- Your salary could be paid tax free into your UK account altough you may wana get paid in UAE to avoid tax on interest from your savings. You can have UK bank account in Jersey which will have UK sort code and account number and set up direct debits to pay you bills, loans, mortgages in UK. Most high street banks such as Barclays, NatWest etc do them.
(5) - Its cheaper to get paid in £ in UAE account and then transfer money to UK or Jearsey off shore account, as Transfers cost 50AED with most UAE banks (£7.5 approx) as compared to get paid in uk or offshore account and then transfer to UAE , usually £25-£30.
(6) If you own a house in UK and renting it out via agent or directly then complete "Overseas Landlord Form" from HMRC to get rent Gross (before tax) and register for "Self Assessment" with HMRC and you will at the end of tax year receive SA forms. If the property is jointly owned then both of you will have to SA.
(7) remember your Mortgage Interest you pay, agents fees, insurances and maintenance costs, Council Tax payable can be deducted from the tax able rent. Also if thats the only form of earning you have then you also have £5250 tax allowance (2007-2008) before you pay basic rate of tax @10%
#92
Banned
Joined: Jan 2008
Location: Bowsher - foot of the mountain, head of an ass.
Posts: 264
Re: Summary
My recommendations would clarify that it is best advice to be out of country at least from 5 April to 6 April following year - not 6th to 5th.
The comment on council tax being deductible is wrong and incautious because: Your tenant should pay council tax and this is out of his taxed income. You can pay it and presumably include it in rent (and in doing so deduct it as a cost) but if he does not pay you rent thenyou still owe the Council whereas if he holds the liability then you will not get chased. The point relates to risk management not tax rules but only under the circumstance I describe can you deduct council tax. But I bet the Tax Officer would reject because it is unusual.
Section (5) is not the best advice because it is specific. Best advise is to look around and consult. This section is also wrong because there is no such thing as a UK offshore account. Also be warned that for Jersey accounts, as opposed to say IoM accounts, there is no staturory depositor protection. The advice is sound but does not take into account risk.
Myu point is therefore it should not be posted as general advice. But the OP has really made an effort and succeeded in getting hold of most of the rules and admin.
#93
Re: UK Income Tax
Yeah, that makes sense, the only reason i was asking is when i moved from Ireland to the UK five years ago, i dont remember filling out any forms. I guess each country differs in how they do things,
all the best, Nikki
ps, you gave me a laugh with the image of me robbing a bank and leaving a forwarding address
all the best, Nikki
ps, you gave me a laugh with the image of me robbing a bank and leaving a forwarding address
#94
BE Forum Addict
Joined: Mar 2007
Location: Abu Dhabi
Posts: 3,968
Re: UK Income Tax
yup council tax rules in Scotland vary from region to region, council to council
#95
BE Enthusiast
Joined: Dec 2007
Location: Doha
Posts: 535
Re: UK Income Tax
Yeah, that makes sense, the only reason i was asking is when i moved from Ireland to the UK five years ago, i dont remember filling out any forms. I guess each country differs in how they do things,
all the best, Nikki
ps, you gave me a laugh with the image of me robbing a bank and leaving a forwarding address
all the best, Nikki
ps, you gave me a laugh with the image of me robbing a bank and leaving a forwarding address
I think the point is, if you leave having settled up, they will not be interested in tracking you. If it is a small amount outstanding, again, you won't be tracked i guess, but it will stay on your account, attracting interest, until you P45 again or somehow get on HMRC's radar.
If you skip the country owing a bundle, they will be looking for you!
#96
Just Joined
Joined: Jul 2008
Posts: 1
Re: UK Income Tax
Hi All,
I've been reading all your questions and answers and wondered if someone could help me too. I am currently looking to move to Dubai at the beginning of October, starting a job with my current firm but being paid on a local wage. After reading your threads & discussions, can you clarify whether that means I would be stung for approx 6 months of tax from the UK until April 2009? At present I am considering a 2 year contract with a years break clause, so i could leave or return after a year of working out there. My employer would not agree to just a year contract?? I have only really the intention of staying a year so I am now worried from reading your points that I would need to stay until Apr 2010 to be able to not get taxed, is this correct?
On top of this I have loans in the UK so I would need to send money back on a monthly basis to pay these, can someone clarify what I may get charged, if im sending this money directly from a UAE account to a UK one?
Please if anyone can answer me as quicly as possible id really appreciate it as I am having to sign the final documents this week....help!
Thanks in advance
I've been reading all your questions and answers and wondered if someone could help me too. I am currently looking to move to Dubai at the beginning of October, starting a job with my current firm but being paid on a local wage. After reading your threads & discussions, can you clarify whether that means I would be stung for approx 6 months of tax from the UK until April 2009? At present I am considering a 2 year contract with a years break clause, so i could leave or return after a year of working out there. My employer would not agree to just a year contract?? I have only really the intention of staying a year so I am now worried from reading your points that I would need to stay until Apr 2010 to be able to not get taxed, is this correct?
On top of this I have loans in the UK so I would need to send money back on a monthly basis to pay these, can someone clarify what I may get charged, if im sending this money directly from a UAE account to a UK one?
Please if anyone can answer me as quicly as possible id really appreciate it as I am having to sign the final documents this week....help!
Thanks in advance
#97
Account Closed
Joined: Jul 2007
Posts: 7,028
Re: UK Income Tax
Hi All,
I've been reading all your questions and answers and wondered if someone could help me too. I am currently looking to move to Dubai at the beginning of October, starting a job with my current firm but being paid on a local wage. After reading your threads & discussions, can you clarify whether that means I would be stung for approx 6 months of tax from the UK until April 2009? At present I am considering a 2 year contract with a years break clause, so i could leave or return after a year of working out there. My employer would not agree to just a year contract?? I have only really the intention of staying a year so I am now worried from reading your points that I would need to stay until Apr 2010 to be able to not get taxed, is this correct?
On top of this I have loans in the UK so I would need to send money back on a monthly basis to pay these, can someone clarify what I may get charged, if im sending this money directly from a UAE account to a UK one?
Please if anyone can answer me as quicly as possible id really appreciate it as I am having to sign the final documents this week....help!
Thanks in advance
I've been reading all your questions and answers and wondered if someone could help me too. I am currently looking to move to Dubai at the beginning of October, starting a job with my current firm but being paid on a local wage. After reading your threads & discussions, can you clarify whether that means I would be stung for approx 6 months of tax from the UK until April 2009? At present I am considering a 2 year contract with a years break clause, so i could leave or return after a year of working out there. My employer would not agree to just a year contract?? I have only really the intention of staying a year so I am now worried from reading your points that I would need to stay until Apr 2010 to be able to not get taxed, is this correct?
On top of this I have loans in the UK so I would need to send money back on a monthly basis to pay these, can someone clarify what I may get charged, if im sending this money directly from a UAE account to a UK one?
Please if anyone can answer me as quicly as possible id really appreciate it as I am having to sign the final documents this week....help!
Thanks in advance
#98
Just Joined
Joined: Mar 2008
Posts: 3
Re: UK Income Tax
Meow,
Do you provide private UK/UAE tax advice? if so, could you PM me with some details on next steps? thanks
Do you provide private UK/UAE tax advice? if so, could you PM me with some details on next steps? thanks
#99
Forum Regular
Joined: Jul 2008
Posts: 70
Re: UK Income Tax
Presumably they would only want to track you if you owed them money.
Consider this question: "If you leave the UK after robbing a bank without giving your forwarding address, how can they track you if you move to abroad,(Australia, Canada, U.S.A.)???"
If you ever go back to the UK and need the health service, need to re-enter the tax system.....
Consider this question: "If you leave the UK after robbing a bank without giving your forwarding address, how can they track you if you move to abroad,(Australia, Canada, U.S.A.)???"
If you ever go back to the UK and need the health service, need to re-enter the tax system.....
#100
Just Joined
Joined: Aug 2008
Posts: 2
Re: UK Income Tax
Dear all,
I was asked to move to Dubai on 1st October 2008 for 3 years contract. My question is:
Do I need to pay income tax from the 1st of October 2008 until April 2009 when the 2008 UK financial year end?
Or according to lionheart no provided that I spent a whole UK tax year i Dubai, ie at least until April 2010?
Note: I will receive my first payment in Dubai at the end of October in AED in a Dubai bank account.
Cheers!
I was asked to move to Dubai on 1st October 2008 for 3 years contract. My question is:
Do I need to pay income tax from the 1st of October 2008 until April 2009 when the 2008 UK financial year end?
Or according to lionheart no provided that I spent a whole UK tax year i Dubai, ie at least until April 2010?
Note: I will receive my first payment in Dubai at the end of October in AED in a Dubai bank account.
Cheers!
Last edited by dubi dubi; Aug 5th 2008 at 6:50 pm.
#101
Soupy twist
Joined: Dec 2004
Posts: 2,271
Re: UK Income Tax
A colleague who's been in Dubai for about 5 years now had to pay UK tax on part of his first year's earnings here because he moved after the start of the tax year. But with the right advice it may be possible to mitigate that.
#102
Just Joined
Joined: Aug 2008
Posts: 2
Re: UK Income Tax
so where do i get the right advise from? thx for ur reply
#103
Soupy twist
Joined: Dec 2004
Posts: 2,271
Re: UK Income Tax
A financial adviser who specialises in tax issues for British expats would be a good place to start, I'd've thought.
#104
BE Enthusiast
Joined: Dec 2007
Location: Doha
Posts: 535
Re: UK Income Tax
Provided you intend to, and eventually in fact do, satisfy the criteria for being 'Non Resident' then you can take what is termed 'split year treatment' for your year of departure. This is an extra statutory concession whereby you pay tax only on the income you earn up until you leave the UK, but not on your overseas earnings thereafter.
Go to the HMRC website - All the info is on there.
Go to the HMRC website - All the info is on there.
#105
Re: UK Income Tax
Dear all,
I was asked to move to Dubai on 1st October 2008 for 3 years contract. My question is:
Do I need to pay income tax from the 1st of October 2008 until April 2009 when the 2008 UK financial year end?
Or according to lionheart no provided that I spent a whole UK tax year i Dubai, ie at least until April 2010?
Note: I will receive my first payment in Dubai at the end of October in AED in a Dubai bank account.
Cheers!
I was asked to move to Dubai on 1st October 2008 for 3 years contract. My question is:
Do I need to pay income tax from the 1st of October 2008 until April 2009 when the 2008 UK financial year end?
Or according to lionheart no provided that I spent a whole UK tax year i Dubai, ie at least until April 2010?
Note: I will receive my first payment in Dubai at the end of October in AED in a Dubai bank account.
Cheers!
You will always be treated as resident if you are in the UK for 183 days or more in the tax year. This includes any visits. There are no exceptions to this.
If you spend less than 183 days (including days of entry & exit) in the UK during the current tax year, you may qualify from what is known as Split Year Treatment. This is not a statutory rule, but a HMRC concession.
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