caker_man
Hi Guys, I searched and didn't find any relevent info to my question.
Situation: My company opened up an office here in DIC. I came here to run the office and my contract states my salary in British Pounds but working in Dubai indefinately. Now the company that does our payroll says they still need to deduct National Insurance contributions prior to transferring my salary to my Dubai bank account. They said I need to ask my company to issue me a P45. I have also filled in a P81 for Inland revenue which would issue me a tax code of NI but even though they claim I will still need to pay national insurance because I am on the "UK Payroll". My company doesn't have a local payroll since I am the only one here. Any comments or suggestions on my situation?
arniegang
You can reclaim you tax as long as you can prove you were out of the country for more than 183 days in any given tax year.
your company is tied to Employers rules with regards your salary, unless you can agree with them to pay via cheque or direct into an offshore account.
If your company has an office in DIC, why do they not have finance facilities set up locally?
caker_man
because it is a new office and I am the only employee.....
the_zooter
- arniegang wrote:
You can reclaim you tax as long as you can prove you were out of the country for more than 183 days in any given tax year.
your company is tied to Employers rules with regards your salary, unless you can agree with them to pay via cheque or direct into an offshore account.
If your company has an office in DIC, why do they not have finance facilities set up locally?
And not more than 90 days per visit!!
You'll never get the NI back (I don't think), but even so, you should still make the minimum contributions whilst you are in Dubai.
Oh, and you have to be out of the country for an entire tax year too. So technically (and I could be wrong here), but if you have only just gone out to Dubai now, then you would have to stay in Dubai until at least April 5th 2008, which is when you could claim your tax back as being a non-resident for tax in the UK.
I'd advise you to see a tax expert though, as this isn't really my area of expertise!!
the_zooter
Just another thought.
Can you not get your company to pay you via the Dubai office, despite you being the only one there?? I'm sure they could probably outsource it if necessary. It will save you a lot of money, and hassle!!
sharewadi
- the_zooter wrote:
Oh, and you have to be out of the country for an entire tax year too. So technically (and I could be wrong here), but if you have only just gone out to Dubai now, then you would have to stay in Dubai until at least April 5th 2008, which is when you could claim your tax back as being a non-resident for tax in the UK.
I'd advise you to see a tax expert though, as this isn't really my area of expertise!!
Yes, that sounds correct. On both points.
People have been caught out before and ended up with an unexpectedly large tax bill since, if you are declared UK resident for tax purposes, all benefits (accommodation, car, school fees for children, flights) are included in their calculations. And they have a pretty good idea of the numbers involved.
Where you perform most of your duties will have a bearing on your status. A concern would be that the tax department sees you as a UK based employee sent to Dubai on a temporary assignment to set up a local office as part of your normal duties.
caker_man
But I believe if you do a P81 which declares you a non-resident then you should be ok? you cannot be a resident of two countries so if you have residency in Dubai then you should complete the P81 in the UK.
sharewadi
If the P81 says you're non-resident for tax purposes then maybe everything's ok but I'm not familiar with the actual form, nor am I anything close to being a tax expert. Is it a declaration made by you? Or by the tax department?
There's a difference between residency and tax-residency. Usually both are in the same country.
You can be resident or tax-resident in more than one country. Double taxation agreements cover tax liability when that happens. Not sure there is one between UK/UAE and it would be moot anyway since there's no income tax here to offset against your UK liability.
If you're here temporarily, and especially if less than a full tax year, you may well be non-resident in the UK but still tax-resident there. Unless the 183 day rule overrides everything.
Best advice I think is to see a tax expert (but make sure you see one familiar with expat situations).
caker_man
A P81 is an Inland Revenue form that you can get from their website. It just states that you are leaving the country to work abroad and they ask you questions like is it permenant, will you have property in the UK, pension status etc etc.... After that they're supposed to give you a NT tax code so that you pay no income tax. But as far as I am aware it doesn't cover your NI contributions.
sharewadi
P81 or P85? I can't find a P81.
Why don't you ?
says...
Quote:
- Q.1 In what circumstances would I become non-UK resident if I left the UK?
A. Normally if you leave the UK permanently or for 3 years or more or to work abroad full-time, you will become not resident and not ordinarily resident in the UK if
your absence from the UK covers a complete tax year (i.e. 6 April to
5 April), and
you spend less than 183 days in the UK during the tax year, and
your visits to the UK do not average 91 days or more a tax year over a maximum of 4 years.
(For visits to the UK, days of arrival and departure are not normally counted as days spent in the UK.)
Quote:
- Q.3 When I go to live or work abroad, will I continue to pay UK tax?
A. If you remain resident in the UK for UK tax purposes, normally you will be taxable on your income arising in the UK and overseas.
If you become non-resident, you will normally only be taxable on your income arising in the UK.
Quote:
- Q.12 In what circumstances will I be treated as a UK resident for UK tax purposes?
A. Broadly, you will be treated as resident for a tax year if
you are in the United Kingdom for 183 days or more in the tax year, or
you visit the United Kingdom regularly and your visits average 91 days or more a tax year over a period not exceeding 4 years, or
you come to the UK for a purpose that will mean you are in the UK for at least two years.
However, this is a complex subject and your residence position depends on your own personal circumstances. If you require more details you should contact
the Centre for Non-Residents
Note the use of the words "normally" and "broadly". I think you should contact the Inland Revenue.
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Arabrit
Hi Guys,
I kno this thread is bit old but I really need help.
I am moving to Dubai soon, and I am totally confused with all this National Insurance/ UK Tax stuff.
So heres the deal.
I am trying to limit liabilities, I want to have peace of mind when I leave to work in Dubai.
So why do I need to do. Fill in a P85 form? Why? What benefit is that to me.
I also kept reading stuff about being oridinary resident or non-resident... whats that about?
Thanks in advance.
Arabrit
Arabrit
Ok this is what I understood. I've just been on the fone to the HM Inland Revenue.
The lady said, I have to stay outside the UK for more than one tax year so that when I bring my money back, I wont be charged any taxes. I can come for holidays but the duration must be less than 183 days.
Anything else I should know about guys?
I was told to fill in a P85 form and send it.... its to do with some refund or somethin.
Arabrit.
XPClone
You send the P85 form along with a P45. The P45 means you have left your job and the P85 informs the tax office that you are no longer in the UK and liable to pay tax. Based on this and the date of issue of your P45 you will get a tax rebate dependant on how much tax you paid.
I still work for the same company here in Dubai but our head office is in the UK. They issued me with a P45 as I was now being employed by the Dubai branch.
sage & onion
- Arabrit wrote:
Ok this is what I understood. I've just been on the fone to the HM Inland Revenue.
The lady said, I have to stay outside the UK for more than one tax year so that when I bring my money back, I wont be charged any taxes. I can come for holidays but the duration must be less than 183 days.
Anything else I should know about guys?
I was told to fill in a P85 form and send it.... its to do with some refund or somethin.
Arabrit.
I thought you were only allowed to go back for a maximum of 61 days in any one tax year.