meonline

There is a good chance I may be offered a job back in the UK before April. However, if that does happen, I will have not completed a full tax year outside of the UK meaning I will be liable to be taxes on my overseas income. I was wondering if it would be possible to pay the HMRC the amount of tax I would have paid if I was working in the UK during this particular time period (working overseas since 4th February 2009). Any advice and/or clarity on the subject would be greatly appreciated.

Bermudashorts

If you do not complete the full tax year out of the country you will need to declare and pay UK tax on all your Dubai earnings. As Dubai is a tax free region there is no reciprocal tax agreement and I am afraid you will be stung for the lot. I don't really know what you mean by "tax would have paid if I was working in the UK".

My advice is very straight forward; don't do it. Don't come back until you have completed a tax year out of the country. Not unless you have lots of savings you don't mind handing over to HMRC.

KerinaK2008

Sorry to butt in on this one, but can one of you shed more light on this tax issue when returning. Does this only apply if you come back to work within a year only? Can i assume any other tax year after will not be affected? Sorry i am just not sure how this works. This March will be 1 year since i have not worked in UK but currently working in Canada. I want to come back and find work by the end of 2010. Will i be liable? I have not been able to fill out the hmrc form either to show i i am working abroad as i can not locate my p45. Do you know if you are penalised for that on your return?

Bermudashorts

To be considered non resident for tax purposes you have to complete one full tax year out of the country but after then a portion of the year is effectively considered non-resident, it is called split year treatment. So it is not that everyone has to leave the country on April 6th one year and return April 5th in another.

Also note my comments above were specifically aimed at Dubai, well in fact to any tax free country. I had the similar situation in Bermuda which is also a tax free regime. The situation for Canada would be completely different, there will be a double taxation treaty in place that will describe how it works for you. (I am afraid I have no experience of how it would work).

Victor Meldrew

I have posted a similar question. I also live in Dubai, have been o/seas for over 8 years, in 3 different ME countries. As a teacher I would return to UK in July of whichever year I return.

I also sent my question to the Inland Revenue (who incidentally are very helpful).

The way I understand the responses I received, I am not liable for Tax on any income I earn in Dubai OR any savings I bring back with me, including the severance/gratuity I receive.

Bermudashorts

That is because you have completed one full tax year out of the country and thus established non residence for tax purposes. Once you have done the full year it does not matter when you come back, IR will just apply split year treatment as I mentioned in my previous post.

ann m

Is there any benefit to waiting till after April 6th? ie, making life easy at the UK end?!

Will the tax office, or your employer be interested in what you did before April 6th (in another country)?

meonline

Thanks very much for clarifying the situation.

donaldson63

I too live in Dubai and have been offered job back in Scotland, but am intending only to return after April 6th should the offer materialise. Te thing I am unsure about is our offshore savings.... if we used these to buy a property back home would these savings be liable to tax?

Bermudashorts

The issue discussed above is not just about returning after April 6th, it is about ensuring you completed one full tax year out of the country. So for example if you left for Dubai on April 10th last year you have not completed one full tax year out of the country and you would be liable for UK tax on everything you earned whilst in Dubai.

There is no tax for bringing your savings into the UK. The UK levies tax on income, not for bringing money into the country.

donaldson63

Thanks Bermuda Shorts, I came here in Feb of 2005 so there should be no issues? good news about the savings!!

Bermudashorts

No there will be no issues.

Beedubya

PLEASE PLEASE tell me that you are talking about going back to the UK from tax free countries, not from Australia where I have surely paid my rightful dues and lots of tax!?????

Bermudashorts

As has been discussed above, the implications of not completing a tax year are only significant if one has been in a tax free country or one that UK does not have a double taxation agreement with. So that would not include Australia, although if you left for less than a full tax year the UK would consider you to have been tax resident throughout.

Beedubya

Gulp............I last left the UK in 1987 moved back there in April 2009 worked from May 2009 until March 2010 came back to Australia in April 2010 and going back in Feb. 2011 which means I have only been away in their eyes for 10 months.........