We've hammered this one elsewhere and I'm not too sure that anything in 2011 will make too much of a difference to what was discussed here
In Feb 2010
The treasury this week has also published draft rules on a tougher ‘residency test’ which will use a greater level of qualitative judgement to determine residency such as family ties and the extent of business interests when determining liability for tax.
I can't find solid info on 2011 yet (If anyone can please post to this thread)
What you are asking about is probably those draft rules coming into force (law maybe) in the new 2011 tax year.
I still suggest that if you are ex-pat, and wish to remain so, you cut all financial, property and social ties with the UK (and contrary to the post from deepseacon : including bank accounts!).
Some of the above references are 2009 and 2010 but you can see where this is all leading.
It has been suggested that eventually the UK may resort to a USA style tax system whereby, no matter where you live or work in the world, if you are a UK citizen you will be liable for tax and will be required to submit an annual tax return to HMRC.
There are a few way of approaching this:
Pay taxes and be done with it!
Live in another EU state and pay taxes there instead (often cheaper).
Become a citizen of another country and revoke your UK citizenship.
Of course you will then pay taxes there anyway
The way the world is going, nobody will get away Scott free in future.
Take Thailand (as a classic example).. the main reason UK citizens are currently not paying taxes locally is because they are on Tourist visas. I'm sure HMRC aren't too happy about that state of affairs either. Hence the USA style tax system that has been suggested is under consideration by HMRC...
aka: As a UK citizen, no matter where you live, you will be nailed for UK tax, unless you are paying tax under a reciprocal tax agreement and can prove to be doing so.
Joined: Dec 11, 2003
Location: Sooke, BC, Canada
21:11 Tue 28 Dec 10
Thanks deepseacon and James
Yes I do remember we had this Topic before but I was wondering if there was any update on information .
I was fully aware like I said regarding Total Sell Up , Close your UK bank account or any other accounts you may have or your libel for Uk tax .
Sounds like I will have a chat with my accountant but like you say " You are supposed to break all ties with the UK then you become a NON Resident Status " , The 90 day rule is just part of it .
Thanks again .
Joined: Aug 28, 2004
21:16 Tue 28 Dec 10
By having a UK bank account will not make you become a Resident from NON Resident Status.
Alone, on it's own, you may be correct but..... if you are ever investigated by HMRC consider this...
You are a UK Citizen.
You used to live in the UK.
You used to work a lot in the UK sector of the North Sea.
You left the UK years ago and became ex-pat by initially staying 365 days out of the UK.
Since then you have never been in the UK more than 89 day a year.
You still have a UK bank account that is active (in even a small way) and pays some bills, pension, on-line shopping, whatever.
You still have a UK credit card which you use.
You still have a UK driving licence.
For your convenience, your banks statements go to your Mum and Dads UK address
The billing address for your credit card is the same UK address.
Your UK driving licence is registered to the same UK address.
One day HMRC decide to investigate you for some reason.
They may well decide that you have long term ties to the UK and therefore are resident for tax purposes, plus they might decide you have been liable for years and claim many years back tax is owed. The 90 day rule will mean jot in the above scenario!
Yes I was just wondering if there was any update as for your questions .
Yes I hold a Uk Passport
I used to live in the UK
I have not worked in the Uk for the passed 24 years .
I have been living in Thailand for 16 years
I am not in the Uk for more than 65 - 70 days a year
But I still I still have a UK bank account as well as my overseas account .
I still have a Uk Credit Card not that it gets used very much
Still have a Uk driving Licence
But fully understand one day I might get a very large Tax Bill from the uk inland revenue which is why I will see what my accountant says .The Tax man can go back 6 years as I had all this years ago .
But I dont work for any Uk companys or agencys and have not done so for the passed 24 years .
I think at the end of the day its all down to the Uk Inland revenue since they can change over night what the requirements are . I did hope that someone might all ready know since there are thousands who might end up being taxed , Well we shall have to wait and see .
Joined: Aug 28, 2004
00:26 Wed 29 Dec 10
I was advised this year that the tax man changed his rules & now if they investigate its only back 4 years.
Point of interest : If your non resident you are not allowed to claim UK SED. However if you do get investigated and the tax mans decides you are Resident for tax purposes you are then entitled to claim SED for the past 4 years. If of course you meet the ever changing rules for SED, which is tough these days.
Hope this helps
Joined: Oct 14, 2006
06:25 Wed 29 Dec 10
Thanks Small World for the information oh there only going back 4 years now ! As I still keep all my receipts and stuff going back about 20 years as you never know when someone might ask to see them .
I think at some stage they will change over to some thing like the states or
Australia were it dont matter if your out of the country or not but in the end its down to How Much You Pay !
I have never claim any thing off the state my whole working life but I think I will check with my accountant in the Uk and see what the new rules are .
But the Uk Inland Revenue are all ways changing the goal posts but like you say it best not to give them any thing to get you investigated for in the first place .
Joined: Aug 28, 2004
18:03 Wed 29 Dec 10
I,m not talking tax fraud here.
My tax advisor specifically has advised me in relation to SED claims if the tax man decides to investigates they used to investigate back 6 years. This time fram has now been reduced to 4 years.
It's not unusual for the tax man to investigate a small % of SED claims. Of course if it's blatant fraud for this time period he may go back futher after he reaches that conclusion. If someone is stupid enough to commit blatent fraud more fool them.
I was investigated a long while back & the tax man actually owed me $ and paid up
Joined: Oct 14, 2006
19:02 Wed 29 Dec 10
Yes I know what you mean as in 83 I also had a investigation not that I had done any thing wrong but found myself across the table from the local inspector of taxes and trying to remember were money had come from 6 years back was a pain .
Best I think just to check with my accountant so I dont end up with a megger size tax bill in 4 years time .
Joined: Aug 28, 2004
20:15 Wed 29 Dec 10
I agree with 225 on this. HMRC may well go back four or six years and if they find little of interest to they may decide that investigating further back will be a waste of manpower and will produce little revenue, which is what it's all about after all. An accountant will tell you what they think HMRC will go back to (four years for example) but ask one to quote the relevant UK law that states four or six years and they probably will not be able to.
On investigation, if HMRC find major areas of concern in say years one, two, and four, they may keep digging back beyond six years.. maybe even eight! Whether individuals are obliged by law to keep records or not, it might well fall on the person being investigated to prove they are clean for the whole period they are under investigation.
If any Ex-Pat reading this has kept good records and have met with all the requirements of being ex-pat over the preceding years (including staying well within the 90 day rule) and not having any long term ties with the UK, then there is a good chance they can sleep easy. I say staying 'well within' the 90 day rule because sailing close to the wind on the 90 day rule was part of the undoing of the defendant in the Gaines-Cooper tax case.
If you are in any doubt start digging through this thread and others to see what you can do to protect your financial and possibly your family's long term interests. By all means take financial advice from a UK tax consultant also, but do not allow them to contact HMRC on your behalf or it will pop you up on HMRC's radar. If HMRC get a whiff of you seeking tax advice within the UK they may start sniffing around themselves.
A note of caution. UK tax consultants are used to dealing with HMRC. Being UK based they know no other way of doing things correctly (in their eyes).. so if you give them permission to deal with HMRC on your behalf, i.e. Power of attorney for tax purposes, it would be very natural for them to ask HMRC if they have any outstanding issues with your tax affairs. You may not have any outstanding issues, but that inquiry could quite possibly create a new tax file and you may become of interest to HMRC simply as a result of an apparently innocent inquiry via your consultant. HMRC might also ask themselves, that if you are Ex-pat, why have you engaged the services of a UK based tax consultant? Yet another UK 'tie' you could do without.
Earlier, I saw mention of not working for UK companies or agencies.
In the context of being ex-pat and the 90 day rule, that won't mean too much to HMRC either. If you break the 90 day rule, or are within the 90 day rule but are viewed by HMRC as having long term ties (I think they call it 'centre of interest' but can't remember the exact term) within the UK, they may well request that you to provide a tax return and investigate you from that point onwards. HMRC won't care if you work though a foreign company in a foreign country and spent most of your living life in a foreign country. As a UK citizen, Ex-Pat or not, if you haven't paid tax in the country you live in through a reciprocal tax arrangement then they will want their cut.
Soon (ish), for those Ex-Pats resident out-with, the UK I suspect that they will be required to provide proof of Permanent Residency and a tax record from the country they are resident in. No proof of residency and no proof of paying tax elsewhere will result in them being required to submit a tax return somewhere. Not hard to guess where HMRC might feel that a UK citizen should submit their return.
Worth a read, especially the bit about a poster asking:
I understand that the number of days an expat can return to the UK in a financial year is going to be reduced to 30. Currently I believe it is 90? Does anybody know anything about this?
Not sure where he got that little snippet from.
Can't find anything concrete on this as yet, but these so called 'rumours' have a horrible habit of becoming fact when it comes to tax.
It's been mentioned elsewhere too. See below......
Watch Out For Tax Changes
Expats who have had their 'non-resident tax status' confirmed by HMRC have no need to trouble themselves about disclosure matters, however constant rumblings to changes to the rules could threaten an expat's non-resident tax status.
Broadly speaking, 'non-resident tax status' is determined by the length of time an expat spends outside the UK in any one or more tax year/s and confirmed by the number of days spent back in Blighty calculated over a one or three year period.
A ‘pumpkin' rule introduced in 2008 stipulates that the physical presence of an expat in the UK at midnight on any given day, now counts as one full day’s presence. This seemingly insignificant little rule change will notch up the number of days some expats spend back in the UK quite considerably. Cinderellas who habitually stretch their visit allowance to the wire had better watch out.
A move to US style residency rules?
What's more, current rumblings in the undergrowth suggest further changes are afoot. My guess is we'll see the UK rules on non-residency mirroring the US model. This would mean that any expat resident in the UK for 31 days or more within a single tax year, or 183 days or more during a three year period, will be deemed to be resident for (UK) income tax purposes. So, an expatriate with non-resident tax status would have to ensure that he/she spends on average less than 61 days back in the UK in any one year stretched over a three year period.
Such a move hasn't happened yet, but non-resident expats should keep watch for any further developments and diary their cross-border movements carefully. We'll keep you posted.
Thanks for the feed back guys I think I will wait and see what my accountant has to say when I return .
As for working for Non UK companys and Agencys I have found this is the best way to keep off the radar because as soon as you work for a UK based company or agency your be flagged and your details will be given up to the
But I think your right very soon the Uk will change over to some thing like the states or Australia its only a matter of time so best to make the most of it while you can .
Joined: Aug 28, 2004
12:08 Thu 30 Dec 10
Point of interest : If your non resident you are not allowed to claim UK SED.
Is not actually correct, it seems to be up to interpretation by the IR. I'm Expat and have been for 5yrs and the taxman refused me a NT code. I'm fully registered as Expat with the uk taxman they have my address overseas and I claim SED online no problem. (I also have no center of interest as its been described in the uk)
When I spoke with them regarding the non issue of an NT code I was told by the IR to claim SED as they would not issue the NT code because I might! work in a UK Taxable location
The issue apparently being I'm staff paid by the UK office even though I don't set foot in the UK
All being said it would appear that it is their bat and ball and they will change and interpret the rules to suite themselves.
As clear as mud as they say
Joined: Sep 28, 2005
18:02 Thu 30 Dec 10
For those that wish to know a bit more about UK Tax Codes:
'NT' (in effect) means No Tax Deducted at source.
Thanks for busting that particular SED myth with some solid irrefutable info. I'm sure that may be of interest to some people around here.
So, is it fair to say that an employee would normally be deducted at source (similar to PAYE) by their UK based employer and each year they would have to claim SED even though they are clearly ex-pat in all sense of the term?
Would they still making Class 1 NI contributions (also deducted at source) to protect their UK pension?
Stating the rather obvious, one would assume that, with an NT code, no tax would be deducted at source by the employer and therefore claiming SED would not be required either. Life would be a lot easier.
View next topic View previous topic
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum You can attach files in this forum You can download files in this forum
ROVworld.com provides information on ROV, ROV Jobs, ROV Work, ROV Training, ROV Pilot, ROV Employment, ROV News, ROV Forum, Subsea, rov pilot vacancies, rov positions and rov work.
We also discuss the merits of ROV training courses. Please read the Forum before you sign up with an ROV Training School or Remote Operated Vehicle Training Academy.