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bigduckontax
bigduckontax, Accountant
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I have been a resident in the UAE for 1.5 years and before

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Hi,I have been a resident in the UAE for 1.5 years and before that I worked in the UK for 9 years (I am a Polish citizen).
I am planning to go back to the UK by the end of the year however before I am back, I was thinking to set up an online business in the UK. Can you explain what impact this would have on my tax? Would I be liable for income tax based on the revenue generated by the business in the UK only or would this complicate my situation further? Does it matter if I would start a business as a sole trader or a ltd company? Thank you

Hello, I am one of the experts on Just Answer, and pleased to be able to help you with your question.

When you left the UK did you send a Form P85 to your tax office?

Customer: replied 6 months ago.
I left 1.5 years ago and no, I haven’t sent the P85. I was planning to send the p85 now in order to get the tax refund (I left in August 2016 and was working until July 2016 in the UK).

Well, remember to date the P85 for your original departure date. On receipt. HMRC will classify you as non resident.

If you start a business in the UK and run it from outside the UK it will still be chargeable to UK Income Tax (IT). If you operate it through a corporate structure then it will be taxed under the UK Corporation Tax (CT) regime at 19%.

I do hope that you have found my reply of assistance.

Customer: replied 6 months ago.
Thank you - just to clarify. Is there an issue with the fact that I haven’t filled in the P85 at the time? Can I have any problems with HMRC upon my return to the UK? When filling in the self assessment for my business (providing it’ll be as a sole trader), do I need to declare any of mine UAE income?

P85s are often filed years after the individual has left as so many people do not know about it. When you eventually return to the UK just advise HMRC by letter of your arrival.

No, just your UK income. As a citizen of an EEA country, you have a Personal Allowance (PA), currently 11.5K, to offset this income.

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