get ready for taxes

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Feb 27th 2016, 3:44 am

#31

Johnnyboy11

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Re: get ready for taxes

Quote:

Originally Posted by John78

Apologies for the thread. I have been trying to read up and work it out myself, but seems quite complex. I have been offered a job in Bahrain, starting in April '16 and plan to work until January 2018. I understand that there is no tax obligations for the 2016/2017 tax year as say, but for the 2017/2018 tax year I have a few queries. I will be home in the UK for 3 months of that tax year, I do not plan on taking any holidays back that total over 10 days in that year, I have no children or home in the UK, but I will start working on my return. Is anyone able to provide any feedback into how the Split year tax option works in my case. Will I be hit for the tax on the entire year? Any help would be muchly appreciated?

You are liable for UK Income Tax and NI contributions on your worldwide earnings until you are confirmed UK Non Resident. For you, the fastest way to do this is physically leave the UK and start full-time work on or before 5th April 2016 and to continue to do so until on or after 6th April 2017, with limited visits or working days spent in the UK. This way you will have worked full-time overseas for a full tax year and will pass the Automatic Overseas Test and be therefore be classes as UK Non-Resident from the day you left the UK. You may also be eligible for the Split Year Concession when you return to work full-time in the UK in 2017/18, subject to several conditions relating to significant breaks and full-time work duration in the UK.

If you leave the UK on or after 6th April 2016, then your next available full tax year is 2017/18, which from your post will also be split. So you wouldn't meet the Automatic Overseas Test, would remain UK Resident throughout and be liable for full UK Income Tax and NI.

Bottom line: Leave for Bahrain and start working before 5th April 2016. Otherwise extend your time working in Bahrain until after 6th April 2018. Completing a full-tax year is critical.