UK residency tests 2013

[alwayzinit]

The revenue are coming gents............

After a consultation period, where they got 120 responses!!!, HMRC have come up with a cunning plan to strip Non Doms of their Non Dom status.

I would post a link but am a luddite.

Strongly suggest any UK originating chaps and chapesses have a look at the proposed mugging:ouch: on the HMRC site

The defining ground rules are somewhat draconian...................

Good luck

[dv8]

HM Revenue & Customs: Meaning of 'residence' and how it affects your tax (http://www.hmrc.gov.uk/international/residence.htm#1)

Just had a quick glance at it but I cant see whats changed

[cheesycol]

Read this along side the HMRC stuff, found it made things clearer:

http://www.kpmg.com/IM/en/IssuesAndInsights/ArticlesPublications/Documents/Sept%202012%20IES%20SRT%20Flowchart_Accessible.pdf

[Mr Good Cat]

No drama then after reading that decision tree...

Don't holiday back in blighty for more than 3 months of the year, and don't overdo it on UK layovers when it comes to bidding the roster (not that they really log your passport entry and exit anyway).

Panic over. :ok:

[Enecosse]

If you work abroad on a fulltime contract, spend less than 90 days a year in the UK, work no more than 20 days in the UK there will be no change. You will be classed as none resident.

Anything more than the above to 183 days then other factors will be applied, 183 and above then you are resident.

[spanner the cat]

What you actually need to look at is this document;

http://www.hm-treasury.gov.uk/d/condoc_responses_srt_or_summary.pdf

Also if you type "statutory residence test" into the search box of the HMRC website it'll lead you on a trail which goes via the treasury website to this document. All worth reading.

Particularly the bit about international transport workers in the link document. :8

Those of us working abroad for foreign airlines are apparently being lumped in with Nigels living in Provence or similar for certain parts of the test.

The basics are though that if you work overseas full time and spend less than 91 days in the UK you're good to go. :ok:

[springbok449]

It's more to do with trying to catch the commuters from BA and VS etc, of which there are quite a few...

[Al Murdoch]

"Non-domiciled" has a very specific meaning - most people working and earning abroad do not fall into that category.

[alwayzinit]

The bit which got me thinking was the :

If you have a place to stay, your own, allowance 1 night per annum, your folks or other relatives, allowance 16 nights per annum.

So if you own a house/flat that is not rented 364 days of the year and you stay 1 night ...............well you get my drift.

New allowance is not 91 days but 46 days as I read the 2013 draft.

Plus the onus is on us to prove we are non resident rather than the HMRC to prove we are.

I hope I am wrong but the new 2013 res test is 100% pass rate, if you hit just one criteria then HMRC consider you as a Res.:sad:

[spanner the cat]

International transportation workers
3.64 The consultation document did not propose any specific rules for international transportation workers, such as pilots, truck drivers and mariners. However, several responses raised questions about how they would be treated and contended that specific rules might be needed. Some suggested that international transportation workers based abroad could become resident too easily under the test.
Government response
3.65 The Government does not believe that the proposed test will have a disproportionate impact on international transportation workers who are based abroad. For example, an individual based outside the UK would be likely to be non-resident if they spent fewer than 90 days in the UK, especially if they had not been resident in the previous three tax years.
However, the Government accepts that specific rules should apply to international transportation workers in respect of FTWA and FTWUK.

Does it need any further spelling out that the intention is that if you go abroad to work full time you are not resident as long as you only come back for less than 91 days and work less than 20 days in UK. Sheesh. Alternatively file a preventative tax return or why not make a donation just in case at your local tax office. cheques payable to Liz W PLC.

They're trying to make it simpler. Grrrrrrrr. :ugh::ugh::ugh:

[777boyo]

The stated intent of HMRC is to make the "are you resident for tax purposes?" question much more subjective and tailored to an individuals specific circumstances, rather than the current much more general "blanket" definition.

As I read the document, one of the much stricter proposed rules relates to the issue of availability of accomodation on visits to UK, as another poster has rightly pointed out. The guys and gals who really need to seek advice from reliable sources about this are the commuters whose families reside permanently in UK. Having close relatives (wives/kids etc) living full time, and being educated, in UK could conceivably be deemed to be sufficient to establish the close links with UK which HMRC will be taking into account in their determination of your Residence status, regardless of where your main employment is located.

Bottom line - talk to someone who REALLY knows the rules - don't rely on interpretations and possibly ill-informed speculation here, on the flight deck, or in the pub. (And the question of "Domicile/Non Domicile" is a completely separate issue from "Residence". Legions of highly paid lawyers make a huge living dealing with that stuff - a minefield.)

7B

[parabellum]

I remember discussion about this sort of thing years ago. Being in the UK for one night that included midnight local time constituted one working day in the UK, this was changed/they wanted to change(?) to, If you arrive one day and leave the next that is two working days etc. Not sure if that ever became the new tax law or not? 20 working days in UK for a ME based airline would not be hard to achieve, I would think, a lot less likely if based in the Far East/SE Asia.


As I read the document, one of the much stricter proposed rules relates to
the issue of availability of accomodation on visits to UK, as another poster has
rightly pointed out. The guys and gals who really need to seek advice from
reliable sources about this are the commuters whose families reside permanently
in UK.

A court case a few years ago really hammered a man who was based for work in France but had all his family in England, he got caught for thousands of £s back tax but I think he may have complicated the issue by lying to HMRC. Bit of a red herring but didn't Cathay Pacific change the status of it's overseas based pilots by making them 'On-Shore' in their base country?

[Enecosse]

For those on a fulltime contract it really is quite simple: Part A: conclusive non-residence
2.4 In some circumstances an individual should have certainty that they are not tax resident in the
UK without having to take account of the connections they have with the UK. Therefore, Part A of
the test will automatically determine that an individual is not resident in the UK for a tax year if
they fall under any of the following conditions, namely they:
• were not resident in the UK in all of the previous three tax years and they are
present in the UK for fewer than 45 days in the current tax year; or
• were resident in the UK in one or more of the previous three tax years and they are
present in the UK for fewer than 10 days in the current tax year; or
• leave the UK to carry out full-time work abroad, provided they are present in the UK for
fewer than 90 days in the tax year and no more than 20 days are spent working in
the UK in the tax year.

Bullet number 3 is the relevant one.
If you work for BA and live in SA, or work for FR in Spain get paid in Eire and have a house and family in the UK then you probably have problems.
Live and work in the ME and meet the above requirements not a problem.
The above was lifted from the consultation paper, leave halfway through the tax year, fill the correct forms and the 90 days is pro rata. You need to be expat for 5 years I think to avoid remittance tax, might be 3.

[Victor Inox]

Agree with other posters who focus on the 'catch all' issue of having any (residential) property in the UK. Once that has been established, the day count becomes practically irrelevant.

[spanner the cat]

Enecosse

If you check out the bit that relates specifically to international transportation workers it disallows you from using the provision of full time work abroad. It airily mentions that the effect shouldn't cause much effect on non residency as it says the part C test probably applies.

The problem is that if you read the various parts of the tests it goes from part A to B to C. As we aren't able to use FTWA we generally fail A and if our only property is in UK, B applies. Full stop do not go to C. Even if you do get to C, if you've done less than 3 tax years abroad your days of presence in UK are ridiculously limited. This is all highly discriminatory (on the basis of occupation) as I could go abroad at the same time as an engineer, working for the same company and be treated differently for UK tax for otherwise similar personal circumstances, ie family remains in UK. In an effort to prevent avoidance by some we are being penalised. Even though it's past the deadline for submissions I've still made one pointing out this unequal treatment. My MP has agreed to take up the case too. Suggest you do the same as whining about it in pprune isn't going to get HMRC to change their twisty little minds.

[falconeasydriver]

Very easy to resolve....

Divorce the missus, on paper at least, then hey presto! all the monies forwarded are non taxable...as is the fact that you are a non resident, get your lawyer to draw up an access agreement if you have kids...and viola! Mr HMRC gets nothing:ok:
Don't believe me? do the research.
All this assumes you and the missus are on good terms of course:ok:

[Flyingstig]

All this assumes you and the missus are on good terms of course

On the other hand......... It's a win win! :ok:

[Enecosse]

Spanner, yes I have read the bit about transport workers, I had a different take on it though.
I agree getting your MP involved would be a good idea, trouble is we are trying to show we have left the country, so there is the problem of claiming to have an MP.
Anyway I am getting advice from an expert later this month, if anything interesting is forthcoming I will share.
By the way I don't think I can be accused of whining on this subject.
If the doom and gloom merchants are correct, then working in the Middle East is a pointless exercise, (for me anyway).

[Lubeoil]

My understanding on reading the guidelines is that we as transport workers are exempt from the 20 days maximum working in the UK. I thought this meant that we can work more than 20 days in the UK without being due to pay tax. Am I reading this wrongly and we cannot even work less than 20 days in the UK without being due tax? I also thought I read somewhere in the guidelines that a working day in the UK involves working more than three or four hours in the UK before it is actually classed as a working day which should cover our arses. Think as ever you will find no definite answers from the taxman with the usual case by case assesment as they see fit. Another concern I have is that if they do find an individual liable for UK tax then is the tax due on income or will they class housing and school fees as taxable income too?

[spanner the cat]

Enecosse
The rules are, if you are a normal person, that you are non-resident, irrespective of other circumstances, if you go abroad to work full time. That your family stay put in UK is irrelevant to most people working full time abroad. It possibly does matter to us. My family are represented by an MP and they are potentially affected by this so I'm not really adding to UK ties by getting them involved as, if I did a normal job, it's your contract of employment not your ties to the UK that matter.

Lubeoil
They make it quite clear that any flight ex UK counts as a day of work and an inbound flight doesn't. You're allowed 20 days of work so no more than 20 UK flights per tax year.

[helen-damnation]

And;
If you're a TRE/TRI don't do outsource training in the UK.

If you're in recruitment be careful too!