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taxadvisor.uk, Chartered Certified Accountant
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I left the UK on 3 September 2012 to work in Saudi Arabia.

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I left the UK on 3 September 2012 to work in Saudi Arabia. I applied for and obtained an NT Tax Code. I was led to believe that I would have a period of 5 years working in Saudi however my contract has been cut short and I have to Leave Saudi on 3 July 2013. What Tax will I be liable for on returning to the UK? I cannot stay in Saudi beyond July 2013 as my accommodation and visa was part of my employment package. I would like to take some time of from work and perhaps live in Spain, Greece or Cyprus for about 6 months. If I did this (not returning to the UK) would this have any bearing on any tax liability I might have?

Hello, if you have any questions or need further clarification after reading my answer please let me know.

 

Thank you for your question

 

 

If you leave the UK permanently the Revenue will usually accept that you are non UK resident from the date of departure. If your departure is not permanent then you may remain UK resident for three years until your position is reassessed. In addition, if you live outside the UK for a complete tax year and do not set foot in the UK you will not be resident in the UK for that tax year.

 

You left the UK for Saudi Arabia on 3 Sep 2012. You have to be out of the country for a complete tax year (6 Apr 2013 to 5 Apr 2014) for your income not to be subject to UK taxation. If you leave Saudi on 3 Jul 2013 and spend the rest of the tax year to 5 Apr 2014 outside the UK then all income earned in the tax year 2013-14 would escape UK tax. Otherwise, you would be deemed resident and your worldwide income would be chargeable to UK income tax.

 

More information on how your residency status is treated for UK tax purposes when you leave the UK is covered in Sec 8 of HMRC6 here

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

 

HMRC has introduced Statutory Residence Test for the tax year 2013-14 onwards and the guidance notes can be downloaded from here

http://www.hmrc.gov.uk/international/rdr3.pdf

 

Your attention is drawn to examples covered in Sec 5 Split year treatment on pages 48 and onwards.

 

Based on dates provided by you, you would remain UK resident for tax purposes and therefore all earnings would be chargeable to UK tax. You will be entitled to your personal allowance - £9.440 for 2013-14 and £8,105 for 2012-13

 

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I hope this is helpful and answers your question. I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

 

Customer: replied 4 years ago.

Would I be liable for tax in any of my chosen countries?

Stephen, thank you for your reply.

 

The countries you have identified all operate personal taxation on income. Although I am not an expert on tax covering those countries, in my opinion your earnings in chosen country (but not what you would have earned in Saudi) would be chargeable to income tax. You may have to move from country to country to ensure you are not deemed resident there for tax purposes to cover taxation on worldwide income.

 

If you were to spend this time in say UAE, and other Middle Eastern Countries that do not tax earnings of individuals, then you would not liable to tax.

 

I hope this is helpful and answers your question. I am available for any follow up questions you may have, and you can use the reply button to post your follow up questions to the page. If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

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Hi Stephen

 

I notice you have viewed my response to your original question about your tax position in UK if you were to return to the UK after a short absence abroad (JACUSTOMER-9y42ug21- Last Viewed on 6/1/2013 at 11:24 PM).

 

Just checking to see if you have any issues relating to your question that I may not have addressed. Please let me know if I can be of further assistance.

 

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.