Director resident in Hong Kong

Director resident in Hong Kong

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Director has been out of the country for most of the tax year and is not resident or ordinarily resident in the UK. He meets the residency rules for Hong Kong for the tax year 2010/11.

Being a director of a UK company he has to prepare a self assessment anyway and is assessed on income arising from 'duties performed in this country'. He will have performed duties for the company but not actually in the UK so my question is should he be assessed in Hong Kong for the tax year as well? Or should he just see what HMRC determine is due and take it from there (I'm not keen on that course of action).

Any pointers will be greatly appreciated

Replies (7)

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By The Innkeeper
31st Oct 2011 15:35

Your Second Paragraph

is wrong. There is no statutory duty for a company director to file form SA 100.

Going back to para 1 you state that he has been out of the UK for most of the year. How long exactly has he been out. Did he complete the relevant form and submit it to HMRC on his departure? Have you had any correspondence with HMRC as to his status

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By Euan MacLennan
31st Oct 2011 15:41

Not resident

I agree that it is an HMRC-propagated fallacy that directors are legally obliged to file personal tax returns.

If he has not performed any duties in the UK and is not resident in the UK, he is not liable to UK tax on anything he has earned for those duties.  Do not disclose the earnings on a UK tax return if you have to prepare one.

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By pjclar02
31st Oct 2011 15:43

Hello there

Further to Innkeeper's comment above, I believe that this individual will need to submit a self-assessment tax return in the UK if he is a company director....please see the below link:

http://www.hmrc.gov.uk/sa/need-tax-return.htm

Best wishes

Paul

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By The Innkeeper
31st Oct 2011 16:02

Just because

The HMRC website states this does not mean that there is a statutory obligation to file a return . I can think of at least one non resident director of this firm where they have confirmed in writing that the don't want a return. My view is that the individual should submit a P85 to HMRC asap and get confirmation in writing that a return is not required. I agree ,of course, with the rest of Euan's observations

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By Pottedbeef
31st Oct 2011 15:45

I was under the impression

that even non-resident directors had to submit a tax return. Irrespective of that he has been sent one to complete.

He has not filled in the form to say he was leaving however he has only been in the UK for 9 days (one trip) in the 10/11 tax year. Therefore no confirmation from HMRC regarding status.

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By Pottedbeef
31st Oct 2011 16:14

Cheers

Thanks for that, I assume he would also be due a refund of any PAYE paid through the tax year (only recently picked this client up)?

 

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Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
31st Oct 2011 16:58

PAYE should not have been operated on salary for income earned outside of the UK.

Fully agree with Euan and the Innkeeper with regards the rules on a director needing to complete a tax return, or not, as the case may be.

If he has been issued a tax return then I presume this is an acceptable method for reclaiming the tax wrongly deducted under PAYE, but as he was non- resident it the year and therefore has no liability to UK tax, I'm genuinely not sure.

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