Income tax abroad, NT code, in Saudi!!!!!

dancingdandare

Hello again

I am being told by my uk employer that i am going to work abroad, in saudi for 18 months min. I will therefore be transfered to the saudi company, and be required to sign a new contract, they will continue my pension and staff benefits that i receieve currrently, therefore i will have no ties with the uk office on salary issues.

My question is that if i am being paid by a saudi company, then i have no local tax to pay. So why is the uk company claiming they are going to take tax as before on my basic salary, as they state the employer is responsible for PAYE tax? but how can they be responsible if i am no longer employeed by them? Also i i then leave the company before completing a full tax year and i come back to the uk, the tax man will put a nice big bill through my door saying i ow £xxxx tax and how do i then get the money off the company that i am no longer an employee of?? seems very complex for something that should not be as messy, any help or guidence on these issues would be great.

What do people think are the correct laws and contractural terms that i should sign?

one more question is a P85 FORM used before leaving the country to claim a no-tax status?

Thanks again for your time.

Cook_County

It sounds as if you are tax equalised to the UK (so a consequence is that you will not get a windfall from the posting). Check your employers policy.

MXW

dancingdandare wrote:

Hello again

I am being told by my uk employer that i am going to work abroad, in saudi for 18 months min. I will therefore be transfered to the saudi company, and be required to sign a new contract, they will continue my pension and staff benefits that i receieve currrently, therefore i will have no ties with the uk office on salary issues.

My question is that if i am being paid by a saudi company, then i have no local tax to pay. So why is the uk company claiming they are going to take tax as before on my basic salary, as they state the employer is responsible for PAYE tax? but how can they be responsible if i am no longer employeed by them? Also i i then leave the company before completing a full tax year and i come back to the uk, the tax man will put a nice big bill through my door saying i ow £xxxx tax and how do i then get the money off the company that i am no longer an employee of?? seems very complex for something that should not be as messy, any help or guidence on these issues would be great.

What do people think are the correct laws and contractural terms that i should sign?

one more question is a P85 FORM used before leaving the country to claim a no-tax status?

Thanks again for your time.

A P85 is what is completed when you leave the UK and are claiming a refund of tax, to enable a repayment to be claimed, you must have terminated your employment in the UK and sent you P45 in along wih the form P85. A P85 is nothing to do with an NT code number. To apply for this you must send in a letter to your tax office, providing full details and requesting an NT code number.

dancingdandare

thanks

so in order to get no-tax status i have to send the P85 in with the P45 attached and a letter requesting a no-tax status. I have been told that a P85 will alone get you the no-tax status, so what is point of P85 if it does nothing

cheers in advance

prenton01

i live in dubai for a uk based company and i can tell you that saudi and all of middle east is tax free
a p85 is worth filling in as your tax payments are calculated on what you will earn that tax year so 99% of the time everyone gets a rebate
as you will be under contract to the company in saudi and not to uk make sure your contract states that wages are tax free also if you are with barclays or lloyds or hsbc you can open a offshore acount with any of these banks (all your direct debits and stuff will be ok and paid as usaul) the only problem with being tax free is if you spend more than 90 days in the uk in one tax yr you will be eligible to pay tax for that year.

your company will not have to pay tax on your wages, my company has 25 peaple based in dubai and are all on uk rotation (go back to uk every 6 weeks for 3 weeks) and everyone of us is tax free

hope that helps any questions about saudi like working or living ect pm me be glad to help, im actually in saudi as im typing nr a place called al khabar

tony

Cook_County

prenton01 wrote:

i live in dubai for a uk based company and i can tell you that saudi and all of middle east is tax free
a p85 is worth filling in as your tax payments are calculated on what you will earn that tax year so 99% of the time everyone gets a rebate
as you will be under contract to the company in saudi and not to uk make sure your contract states that wages are tax free also if you are with barclays or lloyds or hsbc you can open a offshore acount with any of these banks (all your direct debits and stuff will be ok and paid as usaul) the only problem with being tax free is if you spend more than 90 days in the uk in one tax yr you will be eligible to pay tax for that year.

your company will not have to pay tax on your wages, my company has 25 peaple based in dubai and are all on uk rotation (go back to uk every 6 weeks for 3 weeks) and everyone of us is tax free

hope that helps any questions about saudi like working or living ect pm me be glad to help, im actually in saudi as im typing nr a place called al khabar

tony

It is dangerous to imagine that you are "tax-free", for example Chapter 2 of Part 14 of the latest Income Tax rewrite Bill changes UK law from 6 April 2007 for those such as you who are occasional residents abroad.

If you are back in the UK as frequently as you imply you may well still be ordinarily resident in the UK even if you are not resident.

Matters of UK residence for tax purposes are extremely complicated. You need professional advice on these subjects.

prenton01

i am classed as a non resident as my employment is fulltime abroad and it covers a complete tax year
as long as i dont spend more than 183 days in uk during the tax year and my visits back to the uk dont exceed 90 days
even though i rotate out of england i am classed by my company as living in dubai (they provide accomadation ) there i am eligible to pay tax in the country i am working so dubai is tax free i dont pay tax
i will only pay tax on income arising in england as my income is through our dubai office i am not elligible for uk tax.

dancinganddare the same should and will apply to you
check out this link this is everything you need to know on here.
on tip is to set up a payment plan for national insurance contributions

tony

Cook_County

Tony - I agree in principle that IR20 says you need to be in full-time employment for a period including a complete UK tax year.

I take issue with the rest of your post unless you can provide a clear explanation of relevant UK case law and statute. UK residence rules are highly complex and constantly evolving (changes will come into effect on 6 April). Others will have different fact patterns to you, so your case will not form a general rule.

Do you file annual UK returns disclosing travel to the UK?

dancingdandare

This is the situation as i understand it now, complex i think but any how see what the mse dudes think of it...

I am being assigned to work in saudi on a 18month + contract, intially i will be signing a uk staff agreement, meaning i will pay hypo tax on my basic plus the exended work week. I will be paid out of the uk company and keep in place all my uk benifits.

This contract is the first of two as they are currently drawing up a new contract for the sister company in saudi. This is not finalised and as a interim the uk contract will be signed so that i can start over in saudi before the start of the uk tax year.

The understanding is that once i have filled in a p85 and received nt coding, then i will receive all the hypo tax that i have paid on the uk contract, once the saudi contract has been finalised. They have not finalised this contract as they are trying to retain all our staff benifits, such as pension, health insurance, service length...ect... Therefore once on the saudi pay role, and have received a nt coding we will no longer be decuted tax by the uk company, but they will make deductions for pension and match them as normal to input into our DC pension fund.

Does this make sense to people?? is it correct and allowed. Also with regards NI contributions i understand that i will make class 1 contributions when on the uk contract, but once on the saudi contract, i.e. not being paid out of the uk, what level am i entitled to pay? also if the uk company are no longer paying the employer contrcibutions does this effect my entitlement to a full state pension?

Also i have been told that i will be paid my salary from saudi into a uk bank account, is there any problem with this? and what if i opened a off shore bank account will this be tax free and will i beable to draw money from it once in the uk??

thanks in advance for all help

prenton01

dancingdandare

i forgot to put this in my previous link

http://www.hmrc.gov.uk/cnr/faqs_general.htm

tony

prenton01

Cook_County wrote:

Tony - I agree in principle that IR20 says you need to be in full-time employment for a period including a complete UK tax year.

I take issue with the rest of your post unless you can provide a clear explanation of relevant UK case law and statute. UK residence rules are highly complex and constantly evolving (changes will come into effect on 6 April). Others will have different fact patterns to you, so your case will not form a general rule.

Do you file annual UK returns disclosing travel to the UK?

i agree everyones case will be different as for annual uk returns i have a file containing every airline stub and all related documents to do with how many days i have been in the uk and where and when so if any problem did arise my financial advisor would have everything ready to answer all questions