Tax info working in middle east

ladymarmalade222

Hi

I have a question regarding tax issues while working abroad for a friend of mine who is really worried.

He worked in the middle east for a period of around 19 months (started Nov 05) for a company who is now dissolved.

He has recently started perment work in the uk following a year of not working and living off savings. Since starting work in the summer last year his tax code is the usual single tax code so he had no issues there. Recently he applied for Child Tax credits with his new partner and the Tax Office have written asking what he has been doing since Nov 05.

He was assured working in the Middle East was tax free but is now worried he will get a large tax bill now he is on a low wage in the UK.

If the Tax Office try to contact the company in the middle east they will not have any luck( he knows this as he has been unable to gain references and other correspondence since leaving) as they no longer trade.

Do you think he will have to pay tax on earnings from the middle east (he was resident there) ?

Many Thanks for your help

simpywimpy

as far as I know the tax credits won't ask for proof of tax paid, just a figure for the earnings of the previous year. If not sure you can estimate a figure instead but as far as I know it is tax free in the middle east

ladymarmalade222

Thanks simpywimpy
He is not too bothered about tax credits as he has only recently moved in with his new partner so the income for 05-06 will not be counted in their calculation. It is more of what Inland Revenue will do with the information, ie will he be liable for a large tax bill?

Many thanks

ladymarmalade222

Bump!

Anymore Advice?

Many Thanks x

Londonboy_3

So long as your friend was non resident for the period overseas and duties were performed outside the UK, then the middle east earnings should not be taxable in the UK.

They will be non resident providing they stayed out of the UK for a complete tax year (appears to be the case) and spent less than 91 days a year on average back in the UK. The job overseas also needs to have been full time.

He may need to do a P85 (leaving the UK) and a P86 (arrival in the UK) to cover the assignment period to help HMRC establish the residence position.