EK Resignation Tips
Join Date: Jun 2012
Location: Doctor's waiting room
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It can and has taken months rather than weeks for at least some of those that have left after the onset of COVID-19 but these funds were transferred from payroll. I may be wrong here but I understand that foreign transfers are now executed by the trustees? Should this be the case then it could be quicker.
If you are worried about the amount of tax that may or may not be liable, then the cost involved for seeking professional advice will be a drop in the ocean!
If you are worried about the amount of tax that may or may not be liable, then the cost involved for seeking professional advice will be a drop in the ocean!
Join Date: Sep 2014
Location: UK
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My (layman) input, for what it's worth is . . .
I don't think Provident Fund payments are seen as earned income, so I would have thought would not be taxed as such.
As for where you are when you receive any income payment, I do not believe it is relevant. More relevant is the date any payment is made, as it dictates in which tax year it will be assessed. Any income from EK this tax year will be assessed as foreign income in tax year 2020-21.
The main question is whether you will be deemed to be UK resident or non-resident for tax year 2020-21. If you are non-resident, then no tax will be due on EK income. If you are resident, then you will need to declare EK income as foreign income. But, as I noted above, Provident Fund payments may not be seen as income. There will also be the issue of separating true income from any severance payments, if applicable.
I found the rules around UK residency (for tax purposes) far from straightforward, certainly it wasn't a case of just spending more than 183 days in (or out) of the UK in a given tax year. One's ties (property, family, etc.) and the situation in previous years are also considered, so I would advise taking the HMRC Statutory Residence Test (SRT) for not only this year, but previous years too.
There is the option of split year assessment, but that isn't as simple as one would expect it to be.
Professional advice has been rightly suggested but, as long as you can cope with the frustration of links that take you round in circles, or to irrelevant pages (such as residency rules regarding immigration), the HMRC website is pretty comprehensive and clear. Online tax returns are due by the end of January 2021, so you have plenty of time (though paper returns are due by the end of October 2020). I don't think there are many decisions you can make now to influence events other than, of course, to keep clear of the UK until after 6 October!
I don't think Provident Fund payments are seen as earned income, so I would have thought would not be taxed as such.
As for where you are when you receive any income payment, I do not believe it is relevant. More relevant is the date any payment is made, as it dictates in which tax year it will be assessed. Any income from EK this tax year will be assessed as foreign income in tax year 2020-21.
The main question is whether you will be deemed to be UK resident or non-resident for tax year 2020-21. If you are non-resident, then no tax will be due on EK income. If you are resident, then you will need to declare EK income as foreign income. But, as I noted above, Provident Fund payments may not be seen as income. There will also be the issue of separating true income from any severance payments, if applicable.
I found the rules around UK residency (for tax purposes) far from straightforward, certainly it wasn't a case of just spending more than 183 days in (or out) of the UK in a given tax year. One's ties (property, family, etc.) and the situation in previous years are also considered, so I would advise taking the HMRC Statutory Residence Test (SRT) for not only this year, but previous years too.
There is the option of split year assessment, but that isn't as simple as one would expect it to be.
Professional advice has been rightly suggested but, as long as you can cope with the frustration of links that take you round in circles, or to irrelevant pages (such as residency rules regarding immigration), the HMRC website is pretty comprehensive and clear. Online tax returns are due by the end of January 2021, so you have plenty of time (though paper returns are due by the end of October 2020). I don't think there are many decisions you can make now to influence events other than, of course, to keep clear of the UK until after 6 October!
Join Date: Mar 2007
Location: Up North….
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I have been trying to find a UK tax specialist in Dubai but it seems to be harder than expected.
I am definitely classed as non resident, that is not an issue. The taxation part becomes an issue because as soon as you return to the UK my understanding is that you are then classed as resident. The provident fund can take a good few weeks to be received and by then I would be classed as UK resident and liable for tax on earnings in the 20/21 tax year. You are correct that I can apply for a split tax year, but that would just cover earnings outside the UK until the date I repatriated. Having spoken to a Mondial rep they said that HMRC could well declare the provident fund as income liable for tax since it arrives after I return to the UK.
There must be other people in the past repatriated to the UK with a similar situation re the provident fund payment.
Why specifically the 6 October? I am obviously missing something......
I am definitely classed as non resident, that is not an issue. The taxation part becomes an issue because as soon as you return to the UK my understanding is that you are then classed as resident. The provident fund can take a good few weeks to be received and by then I would be classed as UK resident and liable for tax on earnings in the 20/21 tax year. You are correct that I can apply for a split tax year, but that would just cover earnings outside the UK until the date I repatriated. Having spoken to a Mondial rep they said that HMRC could well declare the provident fund as income liable for tax since it arrives after I return to the UK.
There must be other people in the past repatriated to the UK with a similar situation re the provident fund payment.
Why specifically the 6 October? I am obviously missing something......
Join Date: Jun 2017
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I would be grateful if those unfortunately caught up in this, could let us know how long it takes for the PF money to come through after repatriation.
PM me if you prefer.
Join Date: Jun 2012
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I suspect that might be hindering your progress. An accountancy firm in the UK that is dealing with HMRC policy on a daily basis, is likely to be far more in tune with UK tax policy than the vast majority of those that work in the financial sector in Dubai, who are often ultimately trying to limit any engagement with any foreign tax authorities.
Find an accountancy firm in the UK that is recommended by someone you know and trust and get in touch and seek their professional advice.
Find an accountancy firm in the UK that is recommended by someone you know and trust and get in touch and seek their professional advice.
Join Date: Feb 2004
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Try the Fry group. They have offices in UK and Dubai. They are experts on this. Personal recommendation.
www.frygroup.co.uk
www.frygroup.ae
www.frygroup.co.uk
www.frygroup.ae
Join Date: Sep 2014
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I referred to 6 October, Felix, because if anyone returns to the UK before then and stays for the remainder of the tax year (183 days), they would automatically be UK resident for the entire tax year 2020-21 under the first residency test. But if you are opting for a split-year assessment, that wouldn't be relevant. I assume Mondial's advice is on the assumption you will be taking the split-year route.
Sorry, I should have said you have until Jan 2022 to file a self-assessment return for the current tax year. It's the 2019-20 return which is due in Jan 2021.
Sorry, I should have said you have until Jan 2022 to file a self-assessment return for the current tax year. It's the 2019-20 return which is due in Jan 2021.
