Income tax on earnings outside the uk

[Leigh88]

Good evening all
I would greatly appreciate any advice on my situation

I’m currently working in Afghanistan (from sept 2019 until present)

I have spent 30 days in the uk in Feb 2020

Due to Covid I have to leave my job in July.

I’m planning to stay in spain with family until the tax year ends April 2021.

Will I still be eligible to have 90 days in the uk to visit friends/family in the mean time?

I have worked 84 hour weeks for months to try to get on the property ladder in the uk and don’t want to lose 40% because of a situation out of my control.

Help is greatly appreciated

Many thanks

[etf]

As your overseas employment will not broadly encompass a UK tax year (6 April to 5 April) you will be unable to qualify as non-UK resident for 2020/21 under the 3rd automatic overseas test (full-time employment overseas). If however, you are able to restrict the number of midnights you spend in the UK to less than 16 during the year ended 5 April 2021 you will be able to qualify as non-UK resident under the 1st automatic overseas test. Your salary for work performed overseas will then escape UK tax for 2020/21. This is your safest option if you can make it fit.

You should also explore taxation in the country where you will be staying post July.

The UK tax situation in 2019/20 (the tax year of your departure) may be less favourable if you are seeking to claim split tax year treatment under Case 1 because such a claim is contingent upon you qualifying as non-UK resident under the 3rd automatic overseas test in 2020/21 (unlikely per the above analysis unless you can find a new job to flow on from your current role). You may therefore have some UK tax to pay for 2019/20 if the UK tax due on your overseas earnings exceeds the amount of any tax levied in Afghanistan.

[Leigh88]

Thank you for you help, my plan is to fly to Spain in July, stay with family until the new tax year starts April 2021.

I will seek employment in spain during my stay and not exceed the 16 days in the uk.

This way I’m hoping I will escape losing my income to tax, I haven’t worked 84 hour weeks to throw it all away if that makes sense.

Once again thank you

[etf]

You'll need to ensure that there is no significant break in your overseas employment which is a condition of meeting the 3rd automatic overseas test. A significant break from overseas work will occur if at least 31 days go by and not one of those days is a day on which you:

-work for more than 3 hours overseas, or
-would have worked for more than 3 hours overseas but you do not do so because you are on annual leave, sick leave or parenting leave.

[etf]

https://www.pwc.com/gx/en/services/people-organisation/global-employee-mobility/global-mobility-country-guides/assets/gm-folio-Spain.pdf

The above guide is a year out of date, but it should give you some useful pointers of what you should do before you arrive/when you arrive in Spain. From memory obtaining a Spanish NIE number is an important part of the process.

[Leigh88]

Thanks again you’ve been a great help, registered with an accountant and they concluded as long as I do t exceed 16 days in the uk my total earnings will not be taxed for both years. So if I can’t find employment all is not lost

[etf]

Did the accountant explain how your overseas earnings will escape UK tax in 2019/20 if you are unable to meet the 3rd AOT test in 2020/21? Do they think you will qualify for split tax year treatment in 2019/20...if so under which case?