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Where Taxpayers and Advisers Meet

non-residency and spanning 05th/06th April

leicaphile
Posts:2
Joined:Thu Oct 30, 2008 12:47 pm

Postby leicaphile » Wed Aug 13, 2008 1:35 am

Hi,

I have an accountant but am considering changing as he confuses me far more than helps me. I left the UK to work overseas as a security consultant on in March 05. I am still doing this and will be for another year or two - at least until after April 06th 09 (my contract runs till July 09, but I can extend).

I have spent far less than 90 days holiday a year in the UK each tax year and average about 50 per year. When discussing my accounts for the accountant said: 'make sure you are not in the UK for a period spanning 05th and 06th April in any given year as this could leave you tax liable. This has me SERIOUSLY confused and it will mean messing with holiday plans. I was under the impression that if the date I left the UK to work overseas started before a given tax year and ended after the end of the same tax year (or a later one) then I had 'spanned a complete tax year' (or more than one) and so potentially qualify as non-resident and not pay income tax on overseas income from when I leave to when I return, even if in the middle of this period I spent some time in the UK on the cusp of two tax years. So far I have spanned 3 complete tax years (started in Mar 05 and am still doing it) and will do at least another one. If during this 'spanning' I am in the UK over 05th/06th April i.e a period of holiday spans two tax years within that overall period, is it true that I will I end up having to pay tax for the year before and after. I have never heard of this before and have concerns about my accountant as he is a terrible communicator. I did not realise that holiday in the UK mattered with respct to 05th/06th April as long as I spend less than 90 days in the UK and am engaged in work overseas for a period commencing before the tax year and ending after. Does when the holidays/dates (rathe than total days) in the UK fall matter or just the period of employment?

Can anyone please shed some clear advice on this. Do I need to think about another accountant perhaps? I am probably confusing you too :(

Tks,

JSK TAXATION
Posts:200
Joined:Wed Aug 06, 2008 2:18 pm

Postby JSK TAXATION » Wed Aug 13, 2008 2:02 am

L,

Be gentle on your accountant, these issues can be complicated and the concepts sometimes difficult to grasp!

The issue you appear to be referring to is where an individual works abroad under a full time contract of employment. If the employment spans at least 1 complete tax year then normally he will be considered not resident in the UK from the date he departs the UK to take up the employment to the date he returns once the contract is complete. Any visits to the UK in between should be less than 90 days a year on average in order to maintain this status (although it would be advisable to keep this to a lower figure if possible).

The income earned if he satisfies these rules will not be taxable in the UK but of course could be taxable in the country where he is working.

The issue of holidays is not relevant unless of course the contract ends before 1 complete tax year is up and the individual stays outside the UK on holiday in order to 'extend' the period of the contract.

I hope this eases your confusion. If you really feel your present adviser cannot help you any more then by all means call me at your convenience!

Kind regards,

John S King
Chartered Tax Adviser
www.taxation-advice.com
John S King
Chartered Tax Adviser
e: help@taxation-advice.com
w: http://www.taxation-advice.com
01732 897850

leicaphile
Posts:2
Joined:Thu Oct 30, 2008 12:47 pm

Postby leicaphile » Wed Aug 13, 2008 3:20 am

John,

Thanks very much. I realise that tax is complicated, but that's why one pays an expert. I had read all the docs provided by hmrc and still could not see why the accountant was saying what he was saying...so if he is advising me incorrectly, there is something wrong -it can substantially impact on lifestyle/finances and so in order to ensure clarity I will change for my 08-09 return. Thanks again for the clearing this up! I have noted your details.

Rgds

JSK TAXATION
Posts:200
Joined:Wed Aug 06, 2008 2:18 pm

Postby JSK TAXATION » Wed Aug 13, 2008 3:34 am

No worries - all the best. John
John S King
Chartered Tax Adviser
e: help@taxation-advice.com
w: http://www.taxation-advice.com
01732 897850


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