Returning to UK taxation?

Returning to UK taxation?

Author
Discussion

Mattt

Original Poster:

16,661 posts

219 months

Tuesday 23rd March 2010
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When you return part way through a tax year, do you have to advise HMRC? Do they issue you a new code, or do you just have to pay tax on the split-year after completing a SA if you have an NT code for that year?

Asterix

24,438 posts

229 months

Tuesday 23rd March 2010
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No idea to be honest mate.

I fking hate that mob.

Before I left the UK, they said that I hadn't paid income tax on some rubbish and demanded that I pay them in excess of £2k - they also sent my PAYE code through the roof.

I kindly pointed out that I had only ever been PAYE so could you please tell me what was due - they couldn't. After a while and lots of tooing & froing, it ended up, that thanks to them upping my tax code, they then owed me money - more than they said I owed them!

But - they wouldn't pay me unless I paid them - fk that. I then left the country (6yrs ago). Haven't spoken to them since and had to fill out a Non-Resident Landlord Form last week and had a horrible feeling that I'm going to have to go through it all again.

wkers.

Hitch78

6,107 posts

195 months

Tuesday 23rd March 2010
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Pretty sure that the 90 day rule applys here: so if you've not been out of the UK for more than 270ish days in the given tax year then they void your NT code and hand you your arse on a plate for the full amount.

If you've been out of the UK for a number of years then I'm pretty sure you're allowed to average out the 'no more than 90 days in the UK' rule over five years (i.e use years where you've been back for much less than 90 days) to sort the avererage out and retain your tax free status in the year in which you return.

Not leaving are you?

Hitch78

6,107 posts

195 months

Tuesday 23rd March 2010
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This thread has just reminded me that they owe me a grand! I've been 'lucky' enough to get two tax rebates over the past three or four years (because they always get it wrong and take too much) and both times they've mistakenly mispelt my name on the cheque. Once was ok, but twice? Hmmmm...

What I can't understand is how they manage to still spell my name right on the letters they send me - like the one I got this morning asking for 100biffs because my self assesment for YE 2009 arrived late.

I hate them too - they are gits. I think that facing back up to the pain of reading my first P60 if I ever return is going to be tough. Being out here really does highlight how much is grasped out of your wallet in the UK.


Mattt

Original Poster:

16,661 posts

219 months

Tuesday 23rd March 2010
quotequote all
I've satisfied the 'traditional' rule, in that I will have been out for a whole tax year (Jan 09 - June 10) and my visits have been much less than 90 days during the 09/10 tax year.

GT03ROB

13,268 posts

222 months

Tuesday 23rd March 2010
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You'll start paying tax as soon as you start working in the UK. Whatever you earned in the Mid East will remain tax free. Called split year treatment.

Mattt

Original Poster:

16,661 posts

219 months

Tuesday 23rd March 2010
quotequote all
I'll be working for the same employer, so I imagined it would be a 'all or nothing' approach to taxation - and I'd have to make the adjustment through SA.

James72911

189 posts

198 months

Tuesday 23rd March 2010
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Yes, agree with GT03ROB - tax will only be due on income actually earned in the UK. They won't tax your income earned as a non-resident...yet!

GT03ROB

13,268 posts

222 months

Tuesday 23rd March 2010
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Best thing is to write & tell them you are resident again, they will send you a form to complete detailing dates in & out. Fill it in. Then they should just accept there is no tax due prior to you regaining residency & they'll issue you with the correct tax code.

Thats what I've always done anyhow!

cs174

1,150 posts

221 months

Tuesday 23rd March 2010
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I don't know for sure but I think they changed the rules recently whereby they now expect you to pay tax on the income earned overseas regardless of the 96 day rule.

I worked in Moscow recently and a few Brits I worked with were concerned about returning to the UK for this very reason.

I suggest you double check with an accountant before going back.

Edited to add that a quick search on the Motley Fool came up with this:
http://boards.fool.co.uk/Message.asp?mid=11840418&...

Edited by cs174 on Tuesday 23 March 15:59

yorky500

1,715 posts

192 months

Wednesday 24th March 2010
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I left in '97, paid what I owed and have never been back (except on 2 occassions for 3 weeks in total) and I ain't ever going back.

Good luck with the tax thing, no matter which way you turn, I am sure they will be there to screw you.

Harris_I

3,228 posts

260 months

Wednesday 24th March 2010
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Hmmm, interesting. I've been here almost 9 years and the charm has definitely gone out of Dubai.

I'm wondering whether to settle back home and just take the tax hit. This will mean that I won't be incentivised to work hard, build a business that adds real value to the economy, and earn well knowing that half of it will go into a government black hole. This surely is not the intended consequence of the UK govt's mad tax policies.

Instead my only incentive is to accumulate my pot now, park it in income generating assets and head back to do as little work as possible. Ridiculous. Watch the rest of the world grind the UK down into a third world hasbeen.


Hitch78

6,107 posts

195 months

Wednesday 24th March 2010
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yorky500 said:
I left in '97, paid what I owed and have never been back (except on 2 occassions for 3 weeks in total) and I ain't ever going back.

Good luck with the tax thing, no matter which way you turn, I am sure they will be there to screw you.
That's a long time gone mate - I bought a car off a guy in 2007 who'd been out here for ten years and had returned home to retire due to the pension and health benefits. He was back for six months and found that he just couldn't stand the UK anymore. He said he'd rather spend his savings supporting himself through retirement than have to sacrifice his sanity for a meagre pension, bus pass and the NHS!


yorky500

1,715 posts

192 months

Wednesday 24th March 2010
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Its funny how my attitude has changed over the years. Originally, I always thought I would go back one day (retire), buy a nice little house "oop North in Gods country (North Yorkshire)" in a village and live out my life in peace.

However, after being away from the UK for 13 years now, I see there are places that can and do offer far better, however, it does come at a cost. Dubai is not that great, although the cash and tax haven it offers is rather nice. So, until we decide where we want to finally end up, we shall remain here "milking the cash-cow" with possibly one more move to another Country prior to finding a suitable place to retire.

Mattt

Original Poster:

16,661 posts

219 months

Wednesday 24th March 2010
quotequote all
That's the thing, after being here for a year or so, I've got used to the place, and secretly enjoy it at times. I'm not massively looking forward to going to the UK, but work was just depressing - I haven't been challenged for months, everyone just sits around doing nothing, and no-one cares.

It wasn't a good environment, and realised if I stayed much longer I'd become one of them.

Never thought I'd prioritise happiness over money laugh

Now I need to find a job in the UK... although my HR guy said he'd help me out if I wanted to stay (i.e. contacts & NOC etc).

Asterix

24,438 posts

229 months

Wednesday 24th March 2010
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I'm setting up my own company shortly.

If any of the guys here have good marketing experience or strategic business experience, then please let me know.

jezzaaa

1,867 posts

260 months

Thursday 25th March 2010
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GT03ROB said:
You'll start paying tax as soon as you start working in the UK. Whatever you earned in the Mid East will remain tax free. Called split year treatment.
This is, I think, true IF you had already qualified as non-resident for at least one entire tax year. If, however, you had not completed a whole tax year, then they will expect you to pay tax on everything you earned while abroad.

Hitch78

6,107 posts

195 months

Thursday 25th March 2010
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Mattt said:
I'd prioritise happiness over money
Shame on you!

Seriously though I know what you mean, I went from being a 70 to 80 hour a week KPMG consulting Canary Wharf lab-rat to being rarely challenged in the office and home by 5pm every day. I don't miss the hours but I do sometimes miss the buzz, then I remember that I used to get on a train to London on a Monday and get back on a Friday most weeks and I know that at some point that kind of lifestyle may return. A couple of years raking in some readies will do me fine as long as the CV stands up and my cleaners don't return and clear me out again!

Some of the guys I'm doing an MBA with out here are really in that stty work work work cycle, and some of the poor bds are in that cycle in places like Saudi and Kuwait!

What's your line of work Mattt?

And what's your line of business Asterix?

Mattt

Original Poster:

16,661 posts

219 months

Thursday 25th March 2010
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Construction & Engineering - but the Commercial side of it. Been offered some Nuclear work in the UK, again great for the CV, but a 6 hour drive from home - so living away in the week, then knackered at the weekends with the drive home/back. Add to that the massive paycut - probably 50% or more of my current nett, and I have to pay for things like car, housing too - meaning more like 75-80% drop in disposable income.

Still, I did what I came here to do, saved enough for a decent house deposit, had some fun, and stayed as long as I said I would.

I've had some very good times, and some very bad - but the experience was well worth it.

Hitch78

6,107 posts

195 months

Friday 26th March 2010
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Fair play - seems like you've got a sensible approach to the whole thing and if you've done what you came here for then it's probably a good time to move on then.

Your numbers make for some sobering reading though. I think that at the point at which your tax free income becomes your expected norm you become a little stuck and can't find a way out that meets your needs.