Tax Help for Self employed working abroad for Uk companies.

by **johnw100** on Tue Jan 10, 2012 5:45 pm

Hi All

Hope somebody can help with this.

I`m currently living abroad with my family (since May 2010) and am self employed but the money I earn is from UK companies that pay into my UK bank account.
Currently my estimates are that I will be earning below £30,000 a year. I have also declared with the P85 form that i am a non-UK resisdent .
Can anyone explain what my tax implications are, having read HMRC6 document I`m still confused as to whether I am liable to UK taxes or within the country I am now living. I havent totally emigrated from the UK but am looking to live abroad for a few years , possibly more.

Thanks

by **nikkisizer** on Wed Jan 11, 2012 12:55 am

Hi johnw100,

Where are you residing since your departure from the UK?

by **johnw100** on Thu Jan 12, 2012 11:22 am

Hi Nikki

I`m in Argentina.

Thanks

by **etf** on Thu Jan 12, 2012 8:46 pm

Hi johnw100,

HMRC6 details that if you leave the UK to work overseas in a trade, profession or vocation, then as long as your working circumstances are similar to someone working abroad as an employee, you can become not resident and not ordinarily resident (NR/NOR) for UK tax purposes in the same way. Therefore to qualify as not resident and not ordinarily resident:

-your self emploment overseas will have to encompass a complete UK tax year (6 April to 5 April). As you left in May 2010 you will have to remain working overseas until at least 5 April 2012.

-your return visits to the UK must not exceed 182 days in any tax year and must average less than 91 days a tax year.

A later table in HMRC6 details that someone who is regarded as not resident and not ordinarily resident for UK tax purposes is not liable to UK tax on income from a trade or profession carried on wholly outside the UK. Therefore if you qualify as NR/NOR and you carry out all of your work outside the UK you should not have a UK tax problem, although don't ignore UK self assessment tax returns if they get issued to you, particularly with the new penalty regime that applies this year. You will also have to consider the social security/national insurance implications flowing from your move.

I suggest you seek advice locally regarding the overseas tax/social security implications of your self employment.

Kind Regards

etf

http://theexpatriatetaxfactory.com