Working abroad for a year.. tax advice?

Cook_County

Be careful though how you read it...HMRC are these days insisting on full-time employment that lasts at least 1 UK tax year. So your employment contract must be full-time (long school holidays are of course permitted however!) and include at least a UK tax year, so the employment contract must end no earlier than 6 April 2008.

Christal_2

Thanks, Rosysparkle, now going to HMRC website to check out this form.

robellett

TomS/others- the Inland Rev. notes below were collected from their site:

'Part I Meaning of 'residence', 'ordinary residence' and 'domicile' for tax purposes

1 Residence and ordinary residence

1.1 The terms 'residence' and 'ordinary residence' are not defined in the Taxes Acts. The guidelines to their meaning in this Chapter and in Chapters 2 (residence status of those leaving the UK) and 3 (those coming to the UK) are largely based on rulings of the Courts. This booklet sets out the main factors that are taken into account, but we can only make a decision on your residence status on the facts in your particular case.

As mentioned in paragraph 1.4, even if you are resident (or ordinarily resident) in the UK under these rules, the terms of a double taxation agreement with another country might affect your final tax position if, for example, you are resident in both that country and the UK.

Residence

1.2 To be regarded as resident in the UK you must normally be physically present in the country at some time in the tax year. You will always be resident if you are here for 183 days or more in the tax year. There are no exceptions to this. You count the total number of days you spend in the UK - it does not matter if you come and go several times during the year or if you are here for one stay of 183 days or more. If you are here for less than 183 days, you may still be treated as resident for the year under other tests (see Chapter 3, and in particular paragraph 3.3).

The normal rule is that days of arrival in and departure from the UK are ignored in counting the days spent in the UK, in all the various cases where calculations have to be made to determine your residence position - see for example paragraphs 2.2, 3.3 and 3.4 and the examples in 2.10 and 3.6. (This rule is not relevant to the concessionary split year treatment described in paragraphs 1.5 -1.6, where a person coming to or leaving the UK part way through a tax year is resident from the date of arrival or to the date of departure.)

Ordinary residence

1.3 If you are resident in the UK year after year, you are treated as ordinarily resident here. You may be resident but not ordinarily resident in the UK for a tax year if, for example, you normally live outside the UK but are in this country for 183 days or more in the year. Or you may be ordinarily resident but not resident for a tax year if, for example, you usually live in the UK but have gone abroad for a long holiday and do not set foot in the UK during that year.

Residence in both the UK and another country

1.4 It is possible to be resident (or ordinarily resident) in both the UK and some other country (or countries) at the same time. If you are resident (or ordinarily resident) in another country, this does not mean that you cannot also be resident (or ordinarily resident) in the UK. Where, however, you are resident both in the UK and a country with which the UK has a double taxation agreement, there may be special provisions in the agreement for treating you as a resident of only one of the countries for the purposes of the agreement (see paragraph 9.2)'.

Could becoming an employee of your own company help? This way you would potentially determine your employment status, dates etc?

UK derived income will remain taxable - savings etc, even whilst outside of the UK.

http://www.hmrc.gov.uk/pdfs/ir20.htm#residence

Cook_County

I hate to be pedantic but HMRC are not quite accurate in saying that IR20 is "largely based on rulings of the Courts". It is actually based on HMRC interpretation of several cases. In some circumstances HMRC are more generous than the ruling in the relevant case, while in others they are less generous.

So if the amount of money involved is substantial I would take advice rather than try to understand what is now a very old booklet.