We have a colleague who came from New Zealand in 2008 to work in the UK and became a UK citizen.
In the Tax Year 2013-14 he started work in Africa and in that Tax Year worked 102 days in Africa and 6 days in the UK and spent a further 232 days in the UK and 25 days traveling abroad.
In 2014-15 he worked 176 days in Africa and worked no days in the UK but spent 146 days in the UK and 43 days in other countries.
All this time he has been working through his own company and has paid no Tax in Africa as they would not employ him for more than 185 days. He has retained a rented room in the UK.
He has completed the Statutory Residence Test which shows that he is UK resident for 2014-15 by virtue of being in the UK for more than 90 days and having accessible accommodation in the UK.
We would be most grateful if anybody could advise whether there is any partial relief or other relief that he may qualify for?
Many thanks
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Replies (10)
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Has he actually received any income? You have not specified that he has taken a salary, and if not, on what is he going to claim tax relief? For that matter, does he have any UK assessable income? Is he even in self assessment (why did he complete the statutory residence test).
These questions and many more need to be asked and answered. Tell your friend to speak to an accountant. There may be many aspects to this that need to be considered.
Thanks Tim
I have said he works through his own company and has paid himself about £10K salary and the balance of £40K will be through either bonus or dividends which is still to be decided.
The main question relates to Non-residency or possible partial relief which the above facts seem sufficient information.
He has spoken to Accountants but it is a specialised area (hence expensive) and depending on feed back may not be worth pursuing.
Would appreciate any detailed information or advice
Many thanks
Partial relief?
I don't believe there is such a thing. You are either resident or not resident.
You may have to consider domicile, but that applies to foreign income rather than UK income.
If he has paid himself 10K salary for 14/15 then there is not going to be any tax due so the question of relief is moot. Note that since he did not pay himself either a bonus or dividends in that period then there is no other income to consider. Those are the facts and the decision over whether to pay bonus or dividends can only apply to 15/16, it cannot be applied retrospectively.
He should speak to an accountant in any case, since the recent budget changes make it imperative to get good tax advice going forward.
Thanks JC and Tim
The company accounts have not been finalised for the period 14-15 and so dividends if decided would be included in his 2014-15 return making him a higher rate tax payer.
The question of fact we were looking for related to possible non-residency for 2014-15 from the facts given but beginning to think he will not qualify but can anybody comment specifically on this area.
Many thanks
Thanks Tim
Not sure if you have anything better to do with your time. Are you one of these accountants who receives a small companies records to say 31 December 2014 before the filing date and makes no decision after the company year end what the dividends should be as this seems to be what you are insinuating?
Thanks for your humour and company though
Not too sure if relevant, however check if split year treatment applies. This link may give a start.
Whichever country or countries the company did business in may require filing of corporate tax returns as well as personal tax returns. The company or the individual may be entitled from a UK perspective to either treaty or unilateral relief; but would of course need to be compliant with local tax rules where work was performed.
No, I'm just one of those unfortunate accountants who does not have access to a time machine and thus cannot go back and pay a dividend so it is receivable by the client in an earlier tax year than which the decision to pay it was made.
I really envy those of you who have such time machines, as I'm sure it makes life much easier. Of course, you could just be fiddling the facts, but I always like to give the benefit of the doubt.