Working in Cambodia

Seconded to Cambodia and UK tax

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We are just reviewing a new clients tax affairs. They were previously employed by Public Health England and were initially given a secondment contract to work in Cambodia from October 2014 to September 2015. The acutal period ran from October 2014 to July 2016, with the client only returing to the UK for an 8 day holiday during the entire period. 

We are confused as looking at their payslips UK PAYE and NIC was deducted for the entire period. Would an NT code not have been sought given the inital secondment was for a year? Given the circumstances are we correct that the taxpayer was actually non-UK resident from October 2014 to July 2016 and therefore not liable to UK tax on these earnings? Also should class 1 NIC contributions have stopped after 52 weeks?

I assume formal tax returns would be necessary in order to claim the UK PAYE tax back together with a letter to the NI office to claim any relevant class 1 contributions back?

Many thanks

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By David Heaton
24th Jul 2018 14:18

Based on these limited facts, the client was probably non-resident for 2015-16 and would probably get split-year treatment for the years either side. Check out the guidance in the RDR3.

If the original plan was to work overseas for no more than a year, it's no surprise that an NT code wasn't requested - he would have been UK resident and wouldn't have had a 365-day qualifying period. It might have been requested later, once intentions changed, but it wasn't, so he needs to make a refund claim.

You are right about the NICs. Deductions should have stopped at week 53 of his absence, so another refund should be claimed.

Start at https://www.gov.uk/claim-tax-refund for the tax, and at https://www.gov.uk/claim-national-insurance-refund for the NICs.

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Quack
By Constantly Confused
24th Jul 2018 15:40

I had a holiday there once... It's tough, kid, but it's life...

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