Nomad with British business, looks like I am not UK tax resident

plegius

I am EU citizen. I have been studying, working and living in the UK, then moved to Nordic country (which is not my homecountry) then again left to stay in Kenya. Before leaving Europe I established myself as sole trader with my still valid UK bank account, National Insurance Number and address with my siblings in the UK. My business is purely online services.
When it comes to paying taxes, I wanted to clear them with HMRC but just realised I do not fall under British Tax Residency based on Statutory Residence Test.
Now:
- In Kenya I have only visitors permit and have been staying there for more than a year now, yet I do not hold work permit, hence dont pay taxes here.
- According to tax authorities in the nordic country, I am not tax resident from the moment i left the country for good.
- I have never paid taxes in my home country nor I fall under its tax residency rules.
Seems like I am not tax resident anywhere.

I would be totally comfortable with paying my income taxes for HMRC, but does my non tax resident status determine how much I would pay? Does government track amount of days I stay in the UK to determine my status? Seems I am not doing tax evasion anywhere, yet I dont feel comfortable paying no taxes.

xylophone

You say that you have a "British business".

A company incorporated in the UK?

What was the tax position before you left the UK?

Have you consulted HMRC?

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/corporation-tax-enquiries

plegius

I set up as a sole trader one year ago, and at that moment I already have not been qualifying under tax residency rules. The time I practically left the UK was few years earlier, before setting up the business.

Pennywise

Not sure how you can be classified as non resident in the UK if you operate a sole trader business in the UK?

Becoming non resident is all about permanently cutting ties with the UK, but it seems that having a UK sole trader business isn't cutting ties at all.

But, tax residency is a very complex area, so you should consult a specialist accountant.

SuperHan

Pennywise wrote: »

Becoming non resident is all about permanently cutting ties with the UK, but it seems that having a UK sole trader business isn't cutting ties at all.

Not true - you may be thinking of domicile? But you can be non-UK resident and have a house, wife and children in the UK if you spend enough days overseas.


Regardless of your UK residency, you will be required to pay UK tax on any UK income you have (if you are UK resident, you pay UK tax on your worldwide income unless you're a remittance basis payer).


Therefore, any income generated in the UK by your sole trader business here will still be taxable in the UK.


You will self-assess your residency on your UK tax return. The government won't track your days, but if they think you're incorrect in your analysis they may ask you to prove when you were not in the country (by provided outbound boarding cards and that kind of thing).


As Pennywise says, the rules can be complex. I suggest working through the statutory residency tests for the UK if you haven't already to confirm your non-resident status.


(As an aside - you look as though you would be tax resident in Kenya. I'm not an expert of Kenyan tax law by any means, but take a look at the following website. It seems to have a similar 183 day rule as the UK, and it sounds like you have a home in Kenya which makes you tax resident there. Kenya may therefore want to tax all of your worldwide income including your UK income. Depending on your income, rates look lower in Kenya than in the UK so you may be able to claim double tax relief or a treaty exemption to make tax payable in only one jurisdiction).


http://taxsummaries.pwc.com/ID/Kenya-Individual-Residence