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TonyTax, Tax Consultant
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Hello, Ive been offered a job in Yemen, where I will work

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I've been offered a job in Yemen, where I will work 1 month on & 1 month off. If I spend my time off in the UK, will I end up paying tax on my wages?
Thank you.
Mr Grant.


The bare minimum qualification for avoiding UK tax on foreign earnings is that you must complete at least one full tax year (6 April to 5 April) as a non-UK resident. Unless you leave the UK on 5 April, this will normally be the start of the next tax year after you leave the UK several months beforehand. The criteria for establishing non-UK residence can be found here and here.

You need to go through the automatic overseas tests first to see if you meet one or more of those. If you do, that's fine and you should pay no tax on your Yemen earnings.

If you don't meet any of the automatic overseas tests and you won't if you if you spend more than 91 days in the UK in any one tax year then you have to look at the automatic UK tests. If you don't meet any of those tests and you won't if you have a home abroad, whether rented or owned, then you will need to consider the UK ties test. Take a look a the table for "Leavers" about halfway down the page here.

If you were treated as UK resident in the tax year of your departure from the UK, you may qualify for split year treatment for that tax year but you would still need to complete at least one full tax year subsequent to the nsplit tax year as a non-UK resident to avoid a belated UK tax liability. You might qualify for split year treatment under the Case 1 criteria. Take a look at Table E on page 53 of RDR3. That tells you the number of days that you can spend in the UK in the overseas part of the split tax year depending on the month of your departure from the UK.

Based on what you have told me, you are unlikely to qualify for tax free status for your Yemen earnings. You would need to spend far fewer days in the UK and still work sufficient hours abroad.

You may find the flowcharts here useful.

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

Customer: replied 3 years ago.

Thanks for your answer. Very confusing for me. What if I just keep all my salary in my Abu Dhabi bank account and use my credit card in the UK? Do I need to tell the Tax Man i'm working?

Put simply, you need to spend lesss than 91 days in the UK in a full tax year and less than that for the tax year you leave the UK depending on the month you leave the UK. In addition, you have to complete a full tax year as a non-UK resident.

If you think you are taxable you should tell the tax office. Using a credit card in the UK makes no difference, nor does where you keep your earnings. You should complete a P85 before you leave the UK and if you are honest on that, you will struggle to get non-UK residence status based on your projected days in the UK.

Customer: replied 3 years ago.

Thanks so far.

I have been out of the country now for 3 years, only spending less than 3 months a year back at home so should be safe for what I have done so far.

If I were to take this job and just come home for 6 months a year, how much tax would I have to pay? My salary would be 30000 pounds.

Also I have a Military pension, approx 9000 pounds a year and I've paid tax on that for the last 3 years, should I have or is that correct?

Thank you.

Where have you been for the last three years? That may make a slight difference.
Customer: replied 3 years ago.

Afghanistan, for 2 years working for a Swiss company, Supreme, who look after the US Military.

1 year in Abu Dhabi from May 2013 until now.


Leave this with me for a bit and I'll get back to you.

Hi again.

The fact that you have been abroad for several years makes a bit of difference over the maximum ties to the UK you can have based on the number of days you spend in the UK.

Your foreign earnings to date should escape UK tax based on what you have told me. If you spend six months a year in the UK, you will be UK resident and your Yemen earnings will be taxable in the UK. On £30,000 per annum, the first £10,000 would be tax free due to the personal allowance and you would pay tax at 20% on the balance, £4,000.

As you were in the military, your pension is almost certainly a "government service" pension (see here) and that makes it liable to UK tax. However, even whilst non-UK resident, you would still be entitled to a personal allowance to use against it so you should check that you did get that.

Customer: replied 3 years ago.


You said the first 10,000 would be my personal allowance, does the pension not count towards this also. I was thinking I would have to pay on the whole 30000 because of the pension which would cover my allowance. 4000 isnt so bad, if I get half the year off paid.

If I go ahead and accept the job, what would be the next steps I need to take in regards ***** ***** my intentions to our goverment or do I just keep quiet and wait for them to catch up with me?

Will I become self employed and have to declare my earnings?

Once again thanks for your help.

You can have your personal allowance against your pension if you prefer. That would leave £29,000 of your salary taxable at 20% (£5,800).

You could be employed or self-employed when you work abroad. Whoever you will be working for in Yemen will tell you if will be an employee or a self-employed contractor.

As you are currently non-resident, you would need to declare your earnings in a tax return at the end of the tax year as the Yemen employer will not operate PAYE. You'd need to keep a record of your days in the UK so that your tax residency status could be decided. If you did not register for self-assessment for several years, you might end up with a big tax bill you cannot pay.

Customer: replied 3 years ago.

That last paragraph is quite scary...

3 years ago I just left the country and never informed anyone, so I didn't register at all.

Afghanistan was 3 months on, 1 month off, so in that time I never went over the 90 days a year.

Since I started my current job back in May last year I have only been home for 7 weeks so far.

Do you really think I will end up with a big bill?

No, you won't. When I said "a big tax bill", I meant on your Yemen earnings if you didn't declare them for a few years, not your foreign earnings to date.

It is always a good idea to complete a P85 before you leave the UK and are claiming to be non-UK resident but it isn't compulsory. However HMRC may ask for details of your UK visits since you first went abroad. They could do that whether you completed a P85 or not.

There used to be a P86 form which one completed when they returned to the UK after a period of non-UK residence but that was done away with a few years ago.

Customer: replied 3 years ago.


Does it make any difference where my money gets paid to, currently Abu Dhabi & in what currency?

I'm not planned to go home for a while yet so I suppose I should contact the HMRC via email?

It really makes no difference whether the money comes into the UK or not. Your UK residencey status is determined by other factors. At the point when you are treated as being UK resident again, all foreign money you have earned and saved to date will be free of UK tax.

If I were you, I'd not contact HMRC until you are settled in your new job. At that point write a letter and tell them that you changed jobs and that you will be spending more time in the UK and think you will become UK tax resident because of the nature of the 1 month on, 1 month off rota. They will then probbaly register you for self-assessment and issue your first tax return after 5 April 2015.

Customer: replied 3 years ago.

Thank you Tony.

You have been a great help and I will look you up again in the future if I need futher help.

David Grant.

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