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Sam, Accountant
Category: Tax
Satisfied Customers: 14346
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I live in the UK and. My employer is a UAE based company. I

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I live in the UK and I am British. My employer is a UAE based company. I have been with him for two years. I am a private teacher and travel around the world with him. I don't work in the UAE because we travel a lot. The company pays me a monthly wage in pounds and I complete a tax return each year. My accountant says that I am paid by a foreign company so I am self-employed. However, a friend of mine has told me that I should be paying tax as a regular employee because I am based in London and I need to be working in the UAE to be self employed. I am usually out of the UK for 2-3 weeks of each month. I trust my accountant but I need some outside clarification. My friend thinks that my employer should be paying pension etc because he thinks that my employer is operating in the UK if he has hired me who is based in the UK. As far as I know, my company is UAE based and I am a contractor/self-employed. If you understand this, can you explain my situation, please?

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly


I agree entirely with your friend - that you are the UK employer and employee and should be running your own pay through an employer direct payment scheme which allows you to deduct tax and National Insurance under the PAYE system as you are employed and are most defiantly NOT a contractor, and these schemes are set up for exactly these kinds of situation and I am horrified that your accountant does not know this

See link here as to why these schemes are required Read the listing of " These include employees of

  • A foreign embassy or consulate which has refused to operate PAYE, and
  • A foreign employer who has no address in the United Kingdom from which earnings are paid"

You fall under the second category and then here is the link to set up such a scheme and you would fall under direct payment

I think its suits your accountant to charge you to complete a self assessment tax return each year but you can see who is right by the clarification from the HMRC manuals I have provided

Then IF you happen to spend less than 90 days in the UK and none of them are for work purposes, then you may even find you qualify for No Tax status so do ask if you need a little more information on this

Note, however your "employer" is not obliged to pay into a pension for you as they are not UK based, and the direct payment scheme just allows the facilitation initially for you to taxed as an employee and pay National Insurance into a state pension and it may be (as you then form the UK entity for this employer) that you can auto enroll for a employer pension scheme but you would need to discuss this with your employer as to whether they would pay you additional money each month to facilitate this so I would advsie you discuss this with the pension regulator - their contact details are

0345(###) ###-####/strong>

Monday to Friday – 8am to 6pm

They can advsie further and perhaps before you approach your employer

Let me know if I Can assist further





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Customer: replied 5 months ago.
Thanks. I'll contact my accountant. He has read my contract so I don't know why he did not know this or perhaps my explanation was not clear enough. The company is not a UK company and does not operate in the UK but it still should pay me through PAYE? Can foreign companies do that? Last year I spent 6 months out of the UK and this year I will have spent more time out of the UK. Does my company still need to pay through PAYE?
Customer: replied 5 months ago.
Would it be possible for me to officially become self employed with this company?