Terms and EndearmentThe forum the bean counters hoped would never happen. Your news on pay, rostering, allowances, extras and negotiations where you work - scheduled, charter or contract.
HMRC has just started sending out letters to audit non UK residents, has anybody received any yet? if you comply with the 90 days rule there should be problem.
Yes HH that is what I heard. Its all to do with ties to the UK and even if you are out of the country for a year but maintain a Golf Club membership or a family house that you have access to then I think there maybe problems ahead.
I recall a British businessman resident in the Seychelles or maybe Maldives, is presently fighting a tax bill which I think started because he kept horses in UK stables. This could be wrong but I am sure it was something like this that made him come to the attention of HMRC.
I have also heard that next year there may be a 45 day rule and some present allowances for days or arrival / departure, operating etc may be changed and if true they will not be of benefit to anybody but HMRC.
Top tip, keep all rental, utility receipts, also things like work contract and bank statements. These should be enough to satisfy HMRC that you do indeed reside abroad.
are we talking about those with firm ties to the UK but holding a 'residence' visa..... kind of commuting as best they can? i.e. morgages etc?
or is everyone going to start to get nailed, even for transfering money back for small bits and bobs and heading back home only couple times a year or so?
sounds like an excuse to get more of our hard earned cash to me....
Don't forget the 90 day rule is an average of 90 days over three years, so if you have only been away a year and have spent 90 days here in that year, your average is 273 days.
I think it all depends on satisfying HMRC that you have severed ties with the UK.
I have a mortgage but the house has been rented out since 2007 and have been granted permision to receive rent without tax deduction. I have no other ties to the UK.
I guess it would be argued that working abroad and having family living in the house means ties to the UK have not been severed. How it would be dealt with if having property with a family living in it after being divorced and having to pay maintenance etc is another question.
It might cost but the alternative is not really pleasant to think about so a good accountant / advisor might save a lot of grief.
FWIW I suspect in a few years all British people working in the UK or abroad will have to file tax returns and pay tax regardless of the country they are working in.
Last edited by driftdown; 22nd Oct 2012 at 14:58.
Reason: Adding a bit more
Ballsout - I don't think you are correct there. That system would be floored by definition because anyone leaving the UK completely, never to set foot there again, would then be liable for tax for a period after they left due to the days they had lived in the UK before they officially left.
The HMRC6 document says the following -
your visits to the UK after you have left to begin your overseas employment will
– total less than 183 days in any tax year, and
– average less than 91 days a tax year. This average is taken over the period of absence up to a maximum of four years.
So it looks like the average is take from the point of leaving the UK.
Last edited by Full Left Rudder; 22nd Oct 2012 at 18:27.
FWIW the letter asks for clarification as to whether you are resident in the UK or not, points out that their records show your income has not been fully taxed in the UK "because you previously told us you are not resident in the Uk". There then follows a reminder about some of the factors concerning residency, and then asking people to reconfirm their status. I'm not sure the P85 enters into it - From my info HMRC are asking for reconfirmation from everyone working as aircrew who have clqimed to be non-resident.
Rumour control has it HMRC are sending out two slightly differently worded versions of the letter, one to those they consider "low risk" and another version to those who HMRC seem to be more serious interested in.
Even if you do comply with the 183/90 rule following, non limiting, examples make you taxable in the UK:
• Family ties include having a spouse, civil partner, children or other family members you are close to, in the UK.
• Social ties include membership of clubs and societies and events that you regularly attend or host. It also includes any regular recreational engagement, such as returning each year for an annual sporting season.
• Business ties include owning or being a director of a business based in the UK, or having employment, including self-employment, in the UK. Regular employment duties in the UK are a tie and you need to consider the extent,
frequency and nature of those duties. It does not matter if the duties themselves are not taxed, for example because of a DTA.
• Property ties include a house or apartment that you own or lease, or property held primarily for investment but that also provides you with accommodation when you are in the UK. A house or apartment provided for your use for the
duration of your time in the UK as part of an employment package is ‘available accommodation’ and is a tie to the UK
This is the sort of thing that happens when you engage the wrong advice.
The New York State Supreme Court has just ruled 4-3 that a strip club in New York cannot claim a tax exemption for the performing arts because lap dancing does not promote culture in a community.
From my Google research this seems to be the relevant point; "you leave the UK to carry out full-time work abroad (35 hours a week or more), provided you 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."
"At first glance, the proposed rules seem basically unchanged for those leaving the UK for full-time overseas employment, save a complication if they work for more than 20 days in the UK per tax year. This will be a tremendous relief to many thousands of expatriates."
Comply with the above and you should be OK. However I am not a tax expert, so have taken the precaution of arranging an interview with one next month.
