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My husband has a contract to work in Jordan for an EU project.

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My husband has a contract to work in Jordan for an EU project. He is employed on contract through a government agency, who deduct NI and UK tax from his monthly wage. However his contract started in October 2013 and is due to finish 6th April 2015. He has completed a Tax residence Indicator and fulfills the 3rd overseas Indicator to be classed as 'not UK resident' for 2014-2015 and also that tax year 2013-14 meets the split year case 1. However the accountant who filled in his self assessment form in April for the tax year 2013-14 marked 'no' at question 8 (residence etc). I have been told that this can be amended but the pages seem to only deal with tax paid to foreign countries and claiming remittance basis. So does this mean that my husband should be paying tax to Jordans tax people and somehow stop PAYE? The accountant doesn't seem willing or able to discuss this and I have tried to sort it out but go round in circles. Should say that the self assessment for 2013-14 has revealed an underpayment of tax of nearly £10,000 but this is before the year is treated as a split year. Also would my husband be eligible for the yearly tax allowance in each of the two years or would it be pro rata for the split year? Don't want to get the accountant involved just yet if he fails to grasp the problem. Thank you
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.

Hi

Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.

The residence page asks the important questions such as

When did you leave the UK and how many days have been spent out of the UK, which allows HMRC to determine the residence status (and again to see this has continued through to after 05/04/2015 when the 2015 tax return is issued at the year end)

So on the paper version of the SA109 (residence.remittance) he just needs to fill in Question 3, 4,7 and 8,10,12, 13 and 14 (and the questions relate to the period when husband was overseas)

Then question 15 to claim personal allowances (which your husband remains entitled to) question 17 and 18 and 19

You do not fill in the domicile or remittance basis details, they apply to a individual who has come to the UK to live and has overseas income.

However as you employed an accountant to file your husbands tax return they should rectify their mistake free of charge, and I would be inclined to take this up with them - and if you get no joy, then write to the head partner of the firm of accountants. If they are a sole practitioner, then to the accountancy firm they are affiliated with (such as AAT or ACCA etc)

In theory if your husband proves to be treated as not resident (and therefore not liable to UK tax) then yes, he would be liable to tax in Jordan, and should establish his tax position there - perhaps the business that employ him can offer the advise on this, but I have added a link here regarding the personal income position in Jordan for your information.

http://www.ey.com/GL/en/Services/Tax/The-worldwide-personal-tax-guide---XMLQS?preview&XmlUrl=/ec1mages/taxguides/TGE-2013/TGE-JO.xml

Let me know if you have any follow up questions

Thanks

Sam

Customer: replied 2 years ago.

Thank you for the reply, could you just clarify the PAYE position for this tax year as I said this is being stopped at present from his salary so would this stop when he submits the amended self assessment and SA109 or would we have to request this separately? Also should have said he is also automatically enrolled into the employers pension scheme with the relevant tax benefit applied to the contributions would this be affected if he pays tax to a different country?

Expert:  Sam replied 2 years ago.

Hi Marie

Thanks for your response

If your husband spent less than 91 days in the UK (this will be pro rata'd for 2013/2014 so less than approx. 45) AND as this contract will extend beyond 05/04/2015 - then as long as this does not see him making visits to the UK in excess of 9 days for 2014/2015 then he should get a full refund on his tax (not the National Insurance as this remains due for the first 52 weeks of working abroad, and your husband may like this to continue and arrange to pay voluntary National Insurance after this initial 52 week period, to remain entitled to UK benefits etc)

Had your husband completed form P85 on leaving the UK then code NT ( No Tax) would have applied, so you may still wish him to do this, so that the right tax code is applied from now until such time this contract ceases, and he is back in the UK.

Link here for form P85

http://www.hmrc.gov.uk/cnr/p85.pdf

Link here for Voluntary National Insurance contributions whilst working abroad

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

You will have to ask the pension scheme what this position is - as usually contributions made when not resident in the UK do not qualify for tax relief as he then is deemed to not have any relevant UK earnings, but as paid from the UK may still qualify him, but pension schemes are not our remit, just the Uk tax position with HMRC.

Let me know if you have any further follow up questions, but it would be appreciated, if you would rate/accept - so that I am credited for my time.

Thanks

Sam

Sam, Accountant
Category: Tax
Satisfied Customers: 13810
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