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OK, hope this isn't too much of a bone question but here goes...
I am employed by a UK company but work offshore and live in Asia. I have a house in Asia and live there with my wife and have no plans to live in the UK.
Currently claiming seafarers tax but is there any way I could be non resident or not ordinarilly resident for tax purposes or am I completely stuffed because I am paid by a UK company?
Am I doomed to keep going the seafarers route (while it lasts)?
Cheers
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If you haven't done so already have a read of UK Citizen? So you thought you were non-resident!

Quoted below from that thread is what I feel may give you a pretty informed approach to becoming/remaining ex-pat. It does seem very belt and braces but there are one or two ex-pats that would agree with that approach I am sure.

What isn't there is, to qualify initially (as an ex-pat), you need to spend a clear 365 days out of the UK in one hit. I spent about three years with no visits and my HMRC tax trail went cold. Not one visit to the UK should be made in that 365 day qualifying period. I feel it's it's better qualifying in a full UK fiscal tax year - April to April.

For that first qualifying period basically stay in touch with the UK agencies and work direct out of Singapore (for example) or (as I did when I lived in Asia) take agency work in other countries as it comes up. Even then (in Angola for example) withholding tax may be applied at source on your gross day rate.
As an ex-pat you would be able to work in the North sea as the day spent offshore do not count as days in country from an immigration point of view.

To be 100% sure you need to drop off the HMRC radar, and stay off.

jamesmc wrote:

This is my personal take on the deal - it is not to be construed as UK legal nor accounting advice. If you have any doubts contact your accountant.
In general terms (and not in any particular order) to ensure you do not fall foul of HMRC you need to make sure that as a UK Citizen ROV type ex-pat you:


  • Do not own or rent or have your name appear on any UK property deeds, rental contracts or service bills such as Electricity, Gas, Phone etc.
  • Do not own or lease or have your name appear on any UK based vehicle registration documents, be they Cars or Motorcycles
  • Do not ever spend more than 90 days in the UK in any one year.
    Forget being clever on this.. you need to be way under that rather than running it tight up to say 89 days. A day in the country is taken as where you were at midnight and not a full a full 24hr period.
  • No limited company? You are probably OK to work for a UK agency but do not work in the UK North Sea if you wish not to have to submit a UK tax return at some point. It does appear that some UK agencies are under investigation by HMRC. Believe me, when asked, any UK company will cough up your contact and payment details to any tax authority quicker than you can down your first beer after a 4 week trip offshore!!
  • Form a foreign limited company and work as an employee of that company. Better still (for proof of gravity of interest) registered in the overseas country you reside in. UK companies will employ your services, provided through your company, as long as you have sufficient insurances eg. Employers liability/public liability covering your employees (you) internationally to a min £5,000,000 of cover (UK statutory minimum). Canada & USA needs special arrangements.
  • Do not have any banking interests in the UK (I would included Jersey, Guernsey, IOM to that). If you need an EU bank account for small stuff then bank in another EU country but steer clear of UK banks altogether.
  • Break all ties with DVLC - including your UK driving licence.
    If you are non UK resident you are not entitled to a UK licence anyway.
    If you have a UK licence then you have probably used a relatives address for it. HMRC would just love that on as they would deem it as you having accommodation available to you in the UK. Then, based on that, they might suggest you are still resident. You can see where that would lead.
  • Your wife also need to be Ex-Pat (Non resident).
  • Register as a resident in the country you live in. Get a local driving licence. Note: Even if you are registered as a resident of another country HMRC may still deem your gravity of interest as being the UK but foreign residency adds another layer of proof to your gravity of interest being out-with the UK.
  • Make sure that HMRC were indeed advised that you left the UK and have not been resident since then.
  • Do not become a director of a UK company for any reason (as an Ex-pat this is allowed). I did years back (briefly) and HMRC came sniffing for a tax return. I had never drawn salary from the company and by then I was no longer a director and was firmly based in Thailand.
  • If HMRC ever write to you via a relatives address... get them to send it back - 'not at this address'. You do not live there so they should not send correspondence there. If you do answer their letters (sent to a UK address) then it will be clear to them that you have a UK postal address... add a UK driving licence and a UK bank account and they'll be laughing all the way back to the tax office.


In All... have no property,vehicle, banking/fiscal/admin ties at all within the UK.


Tip! Don't ask your UK based 'mates' in the shack how it might work. If they have never been ex-pat themselves the responses will most likely be here-say or an opinion possibly fuelled by jealousy... i.e. I wish I could, but my Mrs would never move.
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225 wrote:
If you think the HMRC will be questioning your non-residency status because you own a UK mobile but have lived in Thailand for years, fear not.


225
Fear Not? On it's own maybe not, but combined with other (fear not) type events it could be a contributing factor to an investigation going against you.
I am tempted to feel that your faith in HMRC is very ill informed unless you are able to advise otherwise. Question: Are you ex-pat?

For example there is a person I am aware of whom has lived in Thailand for years (House in Thailand, Thai wife, kids at local school etc) who is currently being investigated by HMRC mainly due to information supplied by his UK employers. Despite his long term residential/family circumstances HMRC are out to prove that he is not Ex-Pat (i.e. where they feel his gravity of interest lies) and are looking at anything (including no doubt phone bills/contracts) to prove their case. So, living in Thailand for years is not necessarily a 'get out of jail free' card, especially if you have been bouncing back and forth between the UK for work offshore with extra days in country (either end of your trip) that could now be viewed by HMRC as regular UK holidays. Even a holiday so the grandparents can see the kids or whatever (more ties that the HMRC would love to make use of) would not be wise. Fly them out to you or meet them in some other country for a holiday.
You need to make sure the complete ex-pat package is secure.

Also see this link (posted by liddelljohn) from the Bangkok post: http://www.bangkokpost.com/business/economics/35617/british-expatriates-face-higher-tax-bills

Closing Loopholes (See image below)
This clearly highlights.. UK phone contracts as just one item that HMRC will look into. (Member: 225 please take note)


Article in full below:
Published: 5/04/2010 at 12:00 AM
Quote:

British expatriates face higher tax bills


British expatriates who still have connections with their homeland may face a challenge over their residency that could put them at the mercy of the taxman, say international accounting and consultancy firms.
Under the new guidance, UK tax authorities will scrutinise more closely the non-resident status of British citizens living overseas, said Paul Gambles, managing director of MBMG International Co.

Until last year, British expats could claim non-residency status if they spent no more than 91 days a year in the UK.

"Any UK expats could be affected [by the new rules]. The number of days spent in the UK is only one factor now. They're going to look at all other things about the way you arrange your life and decide whether the UK is the centre of your life," said Mr Gambles.

The new guidelines from Her Majesty's Revenue and Customs (HMRC) require British nationals claiming non-resident status to prove they do not retain connections with the UK.

These links include having a property, holding sports or social club memberships, keeping a mobile phone contract and having family there or children going to schools or universities in the UK. A Briton who makes regular visits home could also be liable for UK tax.

UK residents are required to pay British taxes on their worldwide assets and income, whereas generally non-residents only pay UK tax on income that originates from UK sources.

The changes in UK tax practice followed the case against Robert Gaines-Cooper, a British business tycoon who lost his appeal in February this year to HMRC. Mr Gaines-Cooper, who has established a business empire since the 1970s in the Seychelles, claimed to be wrongly denied non-resident status since he complied with HMRC guidance. He is now facing a tax bill estimated to be in the region of 20 million.

Image

Mr Gambles advises British expats to make three checks. The first is to ensure they really are clearly non-resident under the new UK rules. If they could be seen as UK residents, the second step is to decide whether they want to change their lifestyle to sever the connections, which may mean not flying back to the UK every summer to visit their family and friends. Third, they might need to change their approach to tax-planning:

"If you are not prepared to change your life, then the thing you might need to change is your entire tax planning," he said. "You might need to think about planning your affairs from the point of view of being a UK resident, which is a very different outlook to planning your affairs as a non-resident."

John Andes, a partner at KPMG Thailand, said British expats with property offshore should take the necessary steps to convince UK authorities they are not UK residents. "If you are leasing out your home, make sure you have a lease contract to support the lease," said Mr Andes. "If you are working overseas, ensure that you have a proper employment contract at a minimum."

But there are many remaining grey areas to be investigated, such as whether full-time employment is required or how regularly one needs to work.

Transferring a British company pension outside the UK, disposing of non-investment property as well as holding an offshore bank account are also recommended as ways to indicate non-resident status.

With more than 50,000 British expats living in Thailand, the new UK tax rules are expected to have an immediate and long-term impact on Thailand's economy.

"Any UK expats who felt they were non-residents but who are now classed as UK residents may not spend and invest as much in Thailand as the money will be spent on paying UK taxes," said Mr Gambles.

In the long term, the ruling could also affect people planning to retire in Thailand, he added.

"It's going to make a big difference on their views of the cost and benefits of living in Thailand. Maybe they thought they're going to be 40% or 50% better off by living in Thailand or on investment income, but it might not be the case now."

It will also be harder to set up businesses in Thailand and elsewhere as companies in the UK may have to bear the rising costs in sending British nationals overseas, he said.

The rule change could also herald a host of measures from Western tax authorities seeking to boost their tax revenues from nationals overseas.

"The big concern is that the next step by the UK and all the other indebted Western governments will be to move to an American-style tax basis, where all citizens are liable to tax on worldwide gains and income, irrespective of their residence status. This could affect millions of expats worldwide and have a huge impact on the economy of countries such as Thailand," said Mr Gambles.



The bits that stands out for me the most (based on new guidelines) are:

The new guidelines from Her Majesty's Revenue and Customs (HMRC) require British nationals
claiming non-resident status to prove they do not retain connections with the UK.


and

These links include having a property, holding sports or social club memberships, keeping a mobile phone contract and having
family there or children going to schools or universities in the UK. A Briton who makes regular visits home could also be liable for UK tax.


This list below is not exhaustive but, as an Ex-pat, you should seriously consider if the HMRC would view the following as 'retaining connections with the UK'


  • UK bank account
  • Phone contract
  • Regular UK family visits
  • Vehicle in your name
  • Owning UK property
  • Renting UK property
  • UK driving licence registered to a relatives address
  • UK mailing/contact address

(Note: Never give HMRC a UK contact address, or UK phone number.. that is suicidal! The only contact information they should have is your foreign address. Lets face it, you say you live overseas so why would you want mail delivering to the UK? Instruct relatives to return HMRC letters back marked 'not resident at this address'
I would suggest that if you have been guilty of this and have received mail from HMRC (to a UK address) do not respond to it, plus.. write to them now and ensure they know in no uncertain terms that they correct your correspondence address to that of an overseas address.

I'm not suggesting that if you are ex-pat you will be investigated today or in five years time, but it cold happen any time, so I would advise against a short term strategy of sticking your head in the sand. Plan for the longer term.
If/when an investigation does trigger you need to be 100% solid on your tax planning or HMRC will cut your goolies off!!

Lets face it. You are either in one of two categories.

1) Ex-pat with all UK ties (as suggested) severed

2) UK resident with ties in the UK, living overseas for years on tourist visa's with no registered residency anywhere, trying not to pay UK tax.

I would suggest No. 2) will eventually get you.

As a UK citizen if you can't handle meeting the required ex-pat criteria (as suggested) then, no matter where you live, you may have to throw your hands up in the air, admit defeat, and send in your tax return to HMRC as a UK resident. It just ain't that easy no more boss!
James Mc
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www.rovworld.com

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225 wrote:


Back to the original post by Gymshark: claim non-residency and if they insist your still UK resident, even though you live in Asia. Claim Seafarers' as is your right as a UK resident.


100% Agree Thumb Up
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Thanks guys for all the advice and points of view, I have also just managed to contact someone (in the know) so to speak and they are saying the same thing about connections to the UK. I guess all I can do is put in the form and see what happens and if they try to make things difficult then i will revert to the seamans tax.
I'll let you know what happens.
Cheers
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gymshark wrote:
Thanks guys for all the advice and points of view, I have also just managed to contact someone (in the know) so to speak and they are saying the same thing about connections to the UK....


Based on what has been written in this thread and the other on on being an ex-pat were you advised of anything else?
Did we get anything wrong?


I guess you'll will have to be pretty sharp on your records for proof seaman's tax eligibility. Not teaching you to suck eggs but I'd be inclined to keep them as if you actually live in the UK and that is your only tax break option. That way if HMRC do nail you for being a resident (in their eyes) you can pull that ace out of the hole 100% solid.

Good luck all the same. Thumb Up

What of the future?
The way things are shaping up (and from what I have read) I can see the day arrive when the UK moves to the same system as the USA.
No matter where you live in the world, as a UK citizen you'll be obliged to file an annual tax return with HMRC.
It'll be about that time that the seaman's tax rule will be the only option left for UK residents working on ships. I can see that going not long after as the argument promoted by HMRC will likely be if ex-pats do not get a tax break the why should UK seamen. (Not my idea of the way forward, but it would not surprise me if they pull that one).

I would think then, that UK companies will not be able to pay UK citizens gross wherever they may send them. That might trigger an move towards more employees and less day rate offshore work or only employing those that supply services under an incorporated company. It'll cost the companies more in the end but HMRC t will be in a win win situation.... all the way to the Bank.
James Mc
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If you’re living in Thailand, perhaps a “Certificate of Residency” from the Thai Immigration Bureau will give some ‘weight’ to your claimed status to the HMRC.
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redherring wrote:
If you’re living in Thailand, perhaps a “Certificate of Residency” from the Thai Immigration Bureau will give some ‘weight’ to your claimed status to the HMRC.


That's almost impossible to get. You have to live in Thailand 10 years , win one of 300 places offered each year for residency and then wait another 3 years for it to be granted and the fee is £6000 only 700 foreigners have got Thai residency in the last 15 years even though there are over 400,000 living there .
All it then entitles you to is to pay tax and not bother with visas , it takes another 6 years to get voting rights or passport etc.

To be honest, no one bothers.
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I lived in Thailand for years. Not once did I meet a Farang with a residents permit. In the normal run of life... those that need to work, can get work permits (even then, they are not set in stone) but residency permit? As Liddlejohn says... no-one bothers to try, and for good reason.
James Mc
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Liddelljohn,

I refer to Certificate of Residency, not Permanent Residency.

With a little digging,................ check this website out.

http://www.thailawonline.com/en/immigration/residence-certificate-thailand-letter-from-immigration-explaining-your-thai-address

It is only a piece of paper from the Immigration Bureau stating where a foreigner lives. May be useful if you need an official doc stating you are actually residing (domicile) in that country.

The website states what you must bring and can even download it from there as well.

More info here, http://www.thaivisa.com/forum/Certificate-Residence-Immigr-t201875.html?st=25
Quote
redherring wrote:
Liddelljohn,

I refer to Certificate of Residency, not Permanent Residency.

With a little digging,................ check this website out.

http://www.thailawonline.com/en/immigration/residence-certificate-thailand-letter-from-immigration-explaining-your-thai-address

It is only a piece of paper from the Immigration Bureau stating where a foreigner lives. May be useful if you need an official doc stating you are actually residing (domicile) in that country.

The website states what you must bring and can even download it from there as well.

More info here, http://www.thaivisa.com/forum/Certificate-Residence-Immigr-t201875.html?st=25

Cheers,
What I do have for proof of address is my Thai driving license and I also have a house registration book in my name so they will go some way to backing my residency up (I hope). My little yellow book always passes for proof of address in Thailand but I might have to translate it into English for the numpties at HMRC to be able to understand it Very Happy
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Also, how about you register your details with the British Embassy in Bangkok as being a UK ex-pat resident in Thailand. We did.

My understanding of the register is that it's there for times of war, acts of god etc. to help locate/account for UK residents should a disaster occur.

In a few months check that they have you registered so that confirm they have you on record.

The above will help add/build your 'portfolio' as proof of being resident in Thailand.
James Mc
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Ah yes the Thai residence cert , used for getting bank accounts,driving license etc I have had a few of them....one learn new tricks every day.

Still we cant pay any one any tax until some work turns up , its so quiet , why dont we Brits go to UK and claim benefits ...************************************************************
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liddelljohn wrote:

Still we cant pay any one any tax until some work turns up , its so quiet , why dont we Brits go to UK and claim benefits ...**********************************************************************.


I refer you to http://www.rovworld.com/ftopict-626.html, especially the Language section.
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Thanks Ray. I must have missed something.....

Quote:
Language - Do not use offensive language.
This is not a ship offshore it a Forum on the internet and as such is open to people of all ages, so we want everyone to feel comfortable. Offensive language constitutes: profanity, racial, ethnic, and gender based insults or any other personal discriminations, and posts meant to offend or hurt any other members or their work.
If you need to say something do it sensibly with facts, not with insults.
If you have an issue with a members language or attitude on this website please alert Admin by PM or via the feedback form.
If the website Admin deem any posts as offensive then the members account in question may be deleted from the site without warning.
In particular, if it is deemed that you have directly insulted another member your account will most probably be deleted.
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