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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Contemplating taking a work assignment in Qatar Next week,

Resolved Question:

Contemplating taking a work assignment in Qatar Next week, for about 6-12 months
including some offshore trips. have been told there is no tax and no VAT in Qatar?
I have a Ltd company and want to know if I should use this or leave dormant or even shut down and go PAYE

Rgds

Mike
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

If you went the PAYE route, would your employer be a Qatar, a UK employer or an employer from another country?
Customer: replied 2 years ago.

Hi,


Yes the employer is a Qatar company.

Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I draft my answer. There are a few issues to consider so
please bear with me.
Customer: replied 2 years ago.

OK Thanks.


 

Expert:  TonyTax replied 2 years ago.

Hi again.

If you worked as an employee of the Qatar company, the bare minimum amount of time that you would need to be non-UK tax resident in order to not have to pay UK tax would be one complete tax year. That period would start on the first 6 April after you left the UK and end on the following 5 April, though you should not return to the UK until 6 April at the earliest.

 

If you achieved at least one complete tax year as a non-UK resident and satisfied the limits on days spent in the UK as set out in RDR3 here (sections 1, 2 and 3), for the entire period that you were abroad, you would not have to pay UK tax on any of your Qatar earnings from start to finish. The notes on the statutory residence test here are more readily understandable.

If your limited company contracted with the Qatar company with you as its shareholder/director, the UK company would pay corporation tax at 20% on annual profits up to £300,000. If you were the non-resident employee/shareholder, any salary for work done outside the UK would be tax free and your dividend drawings would not be liable to higher rate tax as the tax liability of a non-resident on UK dividends is limited to the notional 10% tax credit a UK dividend carries. Clearly, if you were UK resident when drawing salary and/or dividends, there would be UK tax implications.

I hope this helps but let me know if you have any further questions.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15755
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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