Tax free or tax paid?
Discussion
When you say "tax free" do you mean that your contact states a set contractual gross pay and must pay your taxes yourself out of this at the prevailing rates?
Conversely by "tax paid" do you mean your contact states a guaranteed net amount and the company will cover your taxes to ensure you receive it?
Also, which country, and what contractual basis? (e.g. employee, self-employed, limited co.)
Conversely by "tax paid" do you mean your contact states a guaranteed net amount and the company will cover your taxes to ensure you receive it?
Also, which country, and what contractual basis? (e.g. employee, self-employed, limited co.)
If it's 0% tax then the issue is *probably* your tax liability in the UK.
You should speak to a tax advisor ASAP and get an informed opinion - you could be talking a big liability.
Years ago, when tax was different, I was advised to take 6 months off and travel at the end of a similar contract. I didn't and it cost me.
You should speak to a tax advisor ASAP and get an informed opinion - you could be talking a big liability.
Years ago, when tax was different, I was advised to take 6 months off and travel at the end of a similar contract. I didn't and it cost me.
nyt said:
Years ago, when tax was different, I was advised to take 6 months off and travel at the end of a similar contract. I didn't and it cost me.
With the current "Full time work abroad" test for non-residence, this would likely now be costly, bad advice - such is the changeable nature of tax!Eric Mc said:
In order to escape UK tax you have to be tax resident outside the UK. That is now quite complicated to work out and is based on how many days you are in the UK and how many days you are outside the UK in a given tax year. You need to check carefully these stipulated days.
If my understanding is correct, "days" no longer mean "overnight stays" and you should count them based on how many working days you spend in the UK - flying in on the first flight and out in the evening constitutes a day in the UK.Eric Mc said:
In order to escape UK tax you have to be tax resident outside the UK. That is now quite complicated to work out and is based on how many days you are in the UK and how many days you are outside the UK in a given tax year. You need to check carefully these stipulated days.
There are more tests to consider dependent on the OP's exact circumnstances.From the foreign point of view it depends where you are. In the gulf you can get tax free salaries, but if you are working in a country that has income tax then get it written as tax paid, In the 80's I was MD if a company in Norway, we offered tax paid salaries, and I would go mad if employees refereed to them as tax free, as this upset both our auditors and the tax man. We had an employee who returned a tax demand stating he was paid 'tax free' tax man went wild, and a lot of work to get the tax man to accept that the guy meant tax paid so always refer to the deal correctly.
I've never seen any one overseas who would guarantee that a foreign salary was tax free in your home country. This can be a problem in the middle east, your employer will guarantee it is free of local tax, but he does not know your circumstances and for the reason Eric says he can not guarantee you will not be taxed in the UK.
My experience is that once you are in a country for a while it can be better to revert to a taxable salary, I've done that a few time. Get a guaranteed net income of X, your employer will then pay the tax based only on basic personal tax reliefs and your gross will be X+ %, in a few years, you may decide to buy a house etc and get additional reliefs which will give a higher net for the same gross. What ever you do get it written into your salary that you are entitled to see proof of payment of taxes and get a copy of year end certificate. I've seen loads of cases where the employer did not pay the tax due, (and been caught once myself).
I've never seen any one overseas who would guarantee that a foreign salary was tax free in your home country. This can be a problem in the middle east, your employer will guarantee it is free of local tax, but he does not know your circumstances and for the reason Eric says he can not guarantee you will not be taxed in the UK.
My experience is that once you are in a country for a while it can be better to revert to a taxable salary, I've done that a few time. Get a guaranteed net income of X, your employer will then pay the tax based only on basic personal tax reliefs and your gross will be X+ %, in a few years, you may decide to buy a house etc and get additional reliefs which will give a higher net for the same gross. What ever you do get it written into your salary that you are entitled to see proof of payment of taxes and get a copy of year end certificate. I've seen loads of cases where the employer did not pay the tax due, (and been caught once myself).
The cleaner and the house may be a BIK depends on country and circumstances, e.g. In Norway if your wife accompanies you the house is taxable if your wife stays in the UK its tax free.
These are the sort of complications that your company can't really know, it's up to you if your wife comes. Also how does the tax man know if your wife comes unless you get her a residency permit. So its not easy it can be better to be unaccompanied and get your wife to visit every month.
I've worked in Europe Middle East and Aisa for 40 years and i'm a UK qualified accountant, (out of date UK tax knowledge I admit) if you want some specific advice PM me.
I have mate a the moment who returned to a country, in Asia 4 years ago, he just got demand for tax from 2000 when he worked tax paid for a very big international construction Company that did not pay the taxes over for his last year, which is why I say demand to see proof of payment.
A general rule for me is not to accept a company house get an allowance, with unused allowance paid to you (taxable?), you will find that the HR lady who did the deal on the company rent has no incentive to look at best price indeed they are not unknown to be on a percentage. I can rent a place in the Condo I own for under a grand a month UK, I know people working for oil majors where the company pays twice that.
These are the sort of complications that your company can't really know, it's up to you if your wife comes. Also how does the tax man know if your wife comes unless you get her a residency permit. So its not easy it can be better to be unaccompanied and get your wife to visit every month.
I've worked in Europe Middle East and Aisa for 40 years and i'm a UK qualified accountant, (out of date UK tax knowledge I admit) if you want some specific advice PM me.
I have mate a the moment who returned to a country, in Asia 4 years ago, he just got demand for tax from 2000 when he worked tax paid for a very big international construction Company that did not pay the taxes over for his last year, which is why I say demand to see proof of payment.
A general rule for me is not to accept a company house get an allowance, with unused allowance paid to you (taxable?), you will find that the HR lady who did the deal on the company rent has no incentive to look at best price indeed they are not unknown to be on a percentage. I can rent a place in the Condo I own for under a grand a month UK, I know people working for oil majors where the company pays twice that.
Does the country you'll be living and working in have income tax?
It might help if you let us know the country. I'm guessing the UAE and if I'm right it's good news for tax if you're in the UK less than 90 days a year (as I understand it, my experience may be a bit out of date and I will yield to those more knowledgable than me).
It might help if you let us know the country. I'm guessing the UAE and if I'm right it's good news for tax if you're in the UK less than 90 days a year (as I understand it, my experience may be a bit out of date and I will yield to those more knowledgable than me).
Berw said:
The cleaner and the house may be a BIK depends on country and circumstances, e.g. In Norway if your wife accompanies you the house is taxable if your wife stays in the UK its tax free.
These are the sort of complications that your company can't really know, it's up to you if your wife comes. Also how does the tax man know if your wife comes unless you get her a residency permit. So its not easy it can be better to be unaccompanied and get your wife to visit every month.
I've worked in Europe Middle East and Aisa for 40 years and i'm a UK qualified accountant, (out of date UK tax knowledge I admit) if you want some specific advice PM me.
I have mate a the moment who returned to a country, in Asia 4 years ago, he just got demand for tax from 2000 when he worked tax paid for a very big international construction Company that did not pay the taxes over for his last year, which is why I say demand to see proof of payment.
A general rule for me is not to accept a company house get an allowance, with unused allowance paid to you (taxable?), you will find that the HR lady who did the deal on the company rent has no incentive to look at best price indeed they are not unknown to be on a percentage. I can rent a place in the Condo I own for under a grand a month UK, I know people working for oil majors where the company pays twice that.
I might just do that, thanks. These are the sort of complications that your company can't really know, it's up to you if your wife comes. Also how does the tax man know if your wife comes unless you get her a residency permit. So its not easy it can be better to be unaccompanied and get your wife to visit every month.
I've worked in Europe Middle East and Aisa for 40 years and i'm a UK qualified accountant, (out of date UK tax knowledge I admit) if you want some specific advice PM me.
I have mate a the moment who returned to a country, in Asia 4 years ago, he just got demand for tax from 2000 when he worked tax paid for a very big international construction Company that did not pay the taxes over for his last year, which is why I say demand to see proof of payment.
A general rule for me is not to accept a company house get an allowance, with unused allowance paid to you (taxable?), you will find that the HR lady who did the deal on the company rent has no incentive to look at best price indeed they are not unknown to be on a percentage. I can rent a place in the Condo I own for under a grand a month UK, I know people working for oil majors where the company pays twice that.
If its Saudi then it wont matter there is no income tax in=country, and as I said they will not guarantee that you are free from UK tax. As far as the UK tax is concerned Eric is right the decision on your liability is complicated, you need to be very careful to get it right, lots of people take a chance, and most get away with it. I wouldn't take a chance, especially if you have property in the UK.I took great care to be 100% compliant in the UK, I received a letter 20 years ago telling me not to file any more, after filling a nil return for years, and I am paranoid to not fall back into UK tax.
I would also advise you to think very carefully about Saudi as a first overseas post and taking your wife with you, obviously I do not know the circumstances but as a matter of principle I would advise against, first time overseas is not easy, first time in Saudi is not easy, I would not combine the two.
I would also advise you to think very carefully about Saudi as a first overseas post and taking your wife with you, obviously I do not know the circumstances but as a matter of principle I would advise against, first time overseas is not easy, first time in Saudi is not easy, I would not combine the two.
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