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working in Dubai

working in Dubai

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if in the tax year 14/15 i work as self employed in uk for 5 months and then 7 months Dubai (tax free there) do i need this to go on my tax return and pay uk tax?

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By JCresswellTax
07th Jul 2014 16:19

That depends

Are you claiming split-year treatment for 2014/15?

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By JDUFFYCA
07th Jul 2014 18:20


You will not be able claim split year treatment until you have been non resident until the end of the tax year April 2016.

If you are self employed in Dubai then HMRC will argue that this is your UK self employment carried out on an overseas base

You would need to claim cessation of your UK business and start up one overseas and you will need to be non resident for the whole of 2015/16. This will not be easy given the new residency rules

It would make sense to be employed in Dubai or set up a company where you are an employee but will pay no UK tax by concession since you are non resident.

You should be aware that the new residency rules will make claiming non residency difficult if you still have many ties in the UK for example house, wife kids and you visit on a regular basis while away

 

 

 

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By Davie0512
07th Jul 2014 18:55

Similar Situation

I have recently moved to Dubai in the last month.

I have sent in P85 form and read the new residency rules, my understanding of them is that I would be considered non-resident under the third automatic overseas test.

If I work full-time between now and April 2015 and spend no more that 91 days in the UK, would I be considered non-resident for tax purposes?

I have no other ties to the UK, house, family etc

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By sarahtaylor2018
07th Jul 2014 19:11

i will be only there for 7 months and will be employed by a company.  my self employment will cease in the uk in September 2014,  I am single and no house or children - sorry my question didnt make this clear

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By sash100
08th Jul 2014 00:13

Not so straight forward

There are other considerations apart from ties to UK, Afraid you both will need to go through the complicated statutory residency test to determine your UK non residency or residency whatever the case maybe. 

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By JDUFFYCA
08th Jul 2014 00:56


I assume that neither the original poster or Davie 0512 have any expertise in this field and  apologise if you have.  Let me explain

A tax year cannot be split except by concession.  Thus if you arrive in the UK on the 5th of April you would receive a full years tax allowance even although you had only been here for a day.  Similarly if you leave on the 7th of April you would be assumed to be resident for the year and given a full years allowance.  By concession it is possible to claim a "split year" concession where you split the year into an overseas period and a UK period.  However this split year concession is only allowed if it is "adjacent" to period of at least one year when you are non resident.  Thus if you arrive during a tax year you can get it if you had been non resident for the prior year and similarly if you leave during a tax year in order to qualify you must be non resident for the whole of the following year.  It is not possible to split the year when you do not meet the above conditions.

The time away is not relevant if you do not complete one complete year of non residency.  You could leave the UK on the 5th of April 2013 and return on the 7th of April 2014 and be non resident for 2013/14 even although only 1 year and 2 days. Yet you can leave on the 7th of April 2013 and return on the 5th of April 2015 , a period of 2 days short of 2 years  and you would not have been non resident for a complete tax year and therefore subject to UK tax.

The above is the salient point before going through the other residency tests

 

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By Davie0512
08th Jul 2014 16:23

Thanks JDUFFYCA for your input, I was wondering how the split year tax treatment worked.

Can I ask a quick question. If I did meet the third overseas test in that I worked full time overseas between May 2014 and April 2015, did not spend more than 91 days in the UK and did not work more than 31 days in the UK in the tax year.  Would I be considered non-resident for tax year 2014/15?

I have read the guidance on HMRC's website and from what I gather, if you meet any of the automatic overseas tests you are considered non-resident for that tax year.

Cheers

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By michael7
08th Jul 2014 16:45

Sorry if I am being thick - but I thought all the 'concession' stuff went by the way-side when the SRT came in? Doesn't split year only apply if you fall into 1 of the 8 'split-year' scenarios?

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Replying to tasnim675:
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By taxguru
08th Jul 2014 17:06

Absolutely correct

You're absolutely right: split year is defined per para 43 of this schedule, and for leavers case 1, 2 or 3 applies. No concession anymore.

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