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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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Can I get tax relief on earnings that are paid in the from

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Can I get tax relief on earnings that are paid in the from a UK Agency while contracting in Saudi Arabia, time in the UK will be greater than 3 months of any year ?
Submitted: 10 months ago.
Category: Tax
Expert:  bigduckontax replied 10 months ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. You are not by any chance an offshore oil rig worker?
Customer: replied 10 months ago.
No I am an electrical engineer working for an international process company that has a UK based office, normally I work within the UK but recently have been working in Saudi Arabia for 6 months
Expert:  bigduckontax replied 10 months ago.
Right, the only reason I mentioned it was that I am unable to assist oil rig workers. HMRC will not be drawn on their liabilities. Are you going to be in Saudi for longer that the six months you have already done and what are the future overseas prospects?
Customer: replied 10 months ago.
The original trip should have been 3 months but I am now on my second trip and could possibly get 2 more, when I go back to the UK after 3 months for my visa renewal it can take up to 4 weeks and I usually work when I'm home.
Customer: replied 10 months ago.
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Expert:  bigduckontax replied 10 months ago.
I would suggest that you should send a Form P85 to HMRC. On receipt they will classify you as non resident for tax purposes. The form provides for the refund of tax paid to date. Once so classified you can spend up to 91 days in the UK without breaching your non residential status.
Customer: replied 10 months ago.
Yes I know of this rule but I will be in the UK for more than 91 days and a colleague I am worked with mentioned the double tax rule that allows me to pay tax at my place of work for that period, but I cannot make sense of the rule.
I am a director of my limited company
Expert:  bigduckontax replied 10 months ago.
Well the 91 days can be averaged over four years if that is any help. As a director of your limited company you must be remunerated through PAYE channels.
Expert:  bigduckontax replied 10 months ago.
Here is the advice on Which regarding tax liabilities: 'In order to be classed as a non-resident and exempt from UK tax, you will need to;Work abroad for at least one full tax year;Spend no more than 182 days in the UK in any tax year;Spend no more than 91 days in the UK on average over a four-year period.For this purpose, you count as being in the UK on any day when you are here at midnight. Any days spent in the UK because of exceptional circumstances beyond your control (such as illness or flight delays) are not normally counted for this purpose.' So you are going to be caught for tax, a Benjamin Franklin once sagely observed that in life there are but two certainties, death and taxes. The UK has a Double taxation Treaty with Saudi which precludes the same income stream being taxed in both jurisdictions. This is achieved by means of tax credits, tax paid to one country being allowed as a tax credit against any liability in the other.
Customer: replied 10 months ago.
To understand that, I can stay in the UK for more than 91 days in a 12 month period providing I work overseas for up to 4 years and my total uk time is no more than 364 days total
But what if I only work over here for 9 months, is any of my income earned while working in Saudi Arabia eligible for tax relief.
Customer: replied 10 months ago.
Ok, so in a nut shell can my money earned while working in Saudi be tax free or not ?
Expert:  bigduckontax replied 10 months ago.
Well nearly, as that average comes out to 91.25! I would be inclined to ensure that it is below the 90. If you do and retain your non resident status your Saudi earnings will only be exposed to Saudi taxation, if any. A part solution to the 91 day rule is to meet your family for a holiday somewhere overseas, then anywhere in the EU would do.. If you are taxable in the UK, then any Saudi tax deductions can be used as a tax credit against the UK liability on the same income stream. The Treaty, however, does not protect you from differences in rates of taxation.
Customer: replied 10 months ago.
OK Thanks bigduck I'm still non the wiser.
Expert:  bigduckontax replied 10 months ago.
It all hinges on your residential status. If you are going to be out of the UK for substantial periods and not going to breach the 91 rule in any one tax year then your Saudi pay will not be subject to UK taxation; it may still still be taxed by Saudi Arabian authorities. If you breach the 91 day rule then you will be subject to UK income tax on your Saudi income. All in all, it is that simple. A friend is a 25 day on 28 day off on oil platforms. He is liable to UK taxation.
Customer: replied 10 months ago.
Thanks I think that clears my question, I will be in th UK for more than 91 days of the tax year.
Expert:  bigduckontax replied 10 months ago.
Unfortunately then you are going to be landed with UK taxation; what a bore. Please be so kind as to rate me before you leave the just Answer site.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3389
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 10 months ago.
Thank you for your support.

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