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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am a UK citizen living and working on a two year work permit in Kenya and paying tax

Resolved Question:

Hi. I am a UK citizen living and working on a two year work permit in Kenya and paying tax to Kenya through my employer.
I am considering in quitting my job and doing some consultancy work instead but I do not know if I should do this as registering as self-employed to HMRC or using my current social security number in Kenya to register as self-employed in Kenya.
I am trying to understand the risks and benefits of both and what my current residency/tax status will allow me to do.
Thank you.
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi
Thanks for your question and for asking for me.
Where will this consultancy work take place - where will your clients be situated and how much time do you envisage spending in the UK as a result of this self employment venture.
Thanks
Sam
Customer: replied 1 year ago.

I expect that I would apply for short term engagements in Kenya (3 month type jobs or consulting for a few days a week only) in order to test the opportunities and my value in the market.

I expect to leave Kenya within the next 12 months having set up an international client base/experience and consult from overseas as and when required. I may also travel around some other countries and look to engage in some short-term consultancy work as I travel if such work is permitted.

Trouble is I don't understand if I can work as a consultant overseas or must be registered as a consultant in Kenya or whether I could be contracted by another consultancy registered in Kenya and work through their company and what this means in terms of who I should be paying tax too. I've spent months asking and it seems a very grey area.

Expert:  Sam replied 1 year ago.
Hi
Thanks for your response
I am afraid I can only advise you on the UK tax position as this is the UK forms area of expertise
I need to know what time if any you will spend in the UK and whether clients will be in the UK
Thanks
Sam
Customer: replied 1 year ago.

Then how does someone work out their tax position as a UK citizen living as a temporary resident in Kenya? I ask Kenyan tax advisers and they tell me to ask UK ones.

I expect April 2016 I will spend 4 weeks only in the UK and the rest of the time in Kenya assuming I do not leave Kenya earlier. I can justify spending more time in the UK if it makes tax implications easier.

Expert:  Sam replied 1 year ago.
HI
And I can advise the UK tax position - but you are not providing me a straight answer, as to your intentions.
I (and I am sure you can appreciate this) cannot advise what is and what is not easier, I can only advise what is.
Based on the little information you give me (as you still do not advise whether your clients will be UK based, whether you will conduct any work from the UK or whether you will remain in Kenya or leave earlier) that as long as none of this work is undertake for OR in the UK, then you will remain as treated as NON UK RESIDENT for tax purposes, which means you cannot register as self employed in the UK so will follow the tax regime of your country of residence. (which at this time is Kenya)
Only IF
1) You return to live in the UK OR
2) Spend more than 90 days in the UK OR
3) Spend ANY workdays in the UK
Will this advise change - and you then having to consider a UK tax position
Let me know if I can offer any furtehr assistance with this situation
Thanks
Sam
Customer: replied 1 year ago.

Yes apologies. I know this is ambiguous. I am trying tocollect information to inform a decision as to whether to try to set up as a consultant but before I take this fairly big step. In Kenya to do this as a foreigner is very costly and difficult compared to setting up in the UK so I was trying to work out whether I could set up as a sole trader given I am a UK citizen and contract for work overseas for a short period of time (work permits permitting).

I expect my clients to be Kenyan-based or US or UK NGOs/multilaterals with branches working out of Kenya. I expect I will only spend 40 days between now and April 2016 in the UK on my current schedule.

As I see it currently it sounds like from your last answer that I would not be able to set up as a sole trader as I would have lived outside the UK too long in the tax year and as a result I would not be able to paid any consulting fees through a UK bank account as I would be subject to taxation in Kenya not the UK and I would have to set up as a sole trader here to be able to contract any consulting work.

Expert:  Sam replied 1 year ago.
Hi
Thanks for your response.
Even if you set up within the UK for tax purposes, your tax liability is determined by
1) Where you live and carry out the work
2) What period of time you spend in the country in which the work is carried out
If your clients will be Kenyan based, and you plan to remain in Kenya and visits back to the UK will only be 40 days between now and 2016 then even if you are paid into a UK bank account - you will remain liable to tax in Kenya.
Let me know if I can of of any further assistance, but it would be very much appreciated, if you could take the time, to rate the level of service I have provided.
Thanks
Sam
Sam, Accountant
Category: Tax
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