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taxadvisor.uk, Chartered Certified Accountant
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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HelloI have two passports, British and Iranian (I was born

Customer Question

Hello
I have two passports, British and Iranian (I was born in the UK to Iranian parents).
I have lived most of my life in Iran.
Since 2011 I have moved to London, UK, and worked here as a full-time staff member (I'm an engineer in oil and gas energy industry).
I applied for my NI number in 2011 and received one.
My payslip every month showed that every month the company has deducted Tax and National Insurance and then paid me the net salary.
Currently I have resigned from my work and I am moving back to Iran.
However, we have agreed that I work for my company from Iran on a freelance basis (via internet).
We have agreed an hourly rate. Based on the number of hours I invoice my company, they will pay me to my UK bank account. They will pay freelance services without deducting tax and NI.
My question is, with this arrangement, do I need to pay Tax and NI?
If so, how much do I pay and how do I pay it?
My own idea is that I should not pay tax as I'm doing the work outside of UK. But I'm not sure about NI.
Could you please explain this matter to me?

Thank you and regards,
Nikzad
Submitted: 3 years ago.
Category: Tax
Expert:  Nicola-mod replied 3 years ago.
Hello,

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Nicola
Customer: replied 3 years ago.

Hi Nicola,


I can wait a bit more, thank you.


 


Regards,


Nikzad

Expert:  Nicola-mod replied 3 years ago.
Hello Nikzad,

We will continue to look for a Professional to assist you.

Thank you for your patience,
Nicola
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

[q]

My question is, with this arrangement, do I need to pay Tax and NI?
If so, how much do I pay and how do I pay it?
My own idea is that I should not pay tax as I'm doing the work outside of UK. But I'm not sure about NI.
Could you please explain this matter to me?

[a]

As far as Income Tax goes you should complete a form P85 when you leave the country for Iran. This would enable the tax office to get your tax right.

More information on this and Form P85 be can found here

http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=5Ay4eloD0nw

As far as national Insurance Contributions are concerned, you may wish to consider making voluntary contributions to ensure your entitlement to the basic State pension and certain bereavement benefits.

General information on National Insurance Contributions and whether you need to top up your NIC can be found here

http://www.hmrc.gov.uk/ni/volcontr/toppingup.htm

More information on paying voluntary contributions for periods spent abroad can be found here

http://www.hmrc.gov.uk/ni/volcontr/abroad.htm

I hope this is helpful and answers your question.

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