Tax on Foreign Income - UK Resident

JRR23

Hello,

Next month, I am starting a job in Russia. The job schedule is 15 days on and 15 days off. I will be returning to the UK to the house that I own on my 15 days off. Some people have advised me that as I won’t be in the UK for more than 182 days (as some of those 15 days off will occasionally be spent overseas on holiday) that I will be exempt from paying tax in the UK. However, from what I have interpreted, I don’t think that this is the case. I have looked at the links on gov.uk; however, I am still confused by it all as there seem to be so many ‘ifs’ and ‘buts’. I think I am going to be in the 40% tax bracket, which means that I am going to be paying quite a lot of tax. I am not paying tax in Russia. Please can anyone advise me as to whether I will be exempt from tax or if there is any tax relief that I may be entitled to. This is all very new to me and I am not clued up on the UK tax system - my knowledge is very minimal!

Thank you in advance for any help!

TBC15

If you are in full time work abroad and your average hrs work out at more than 35 per week It's my understanding that under the third automatic overseas test the max no of days you could spent in the uk would be 90,in a full tax year. As you are starting work in Sept this will reduce to 52 days in UK for this tax year, this should allow you to get split tax treatment for this tax year.

Should get a nice tax refund for this year if all works out.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/547118/160803_RDR3_August2016_v2_0final_078500.pdf

Spidernick

I doubt very much that you will work 'sufficient hours' abroad for the third automatic overseas test to apply. You will be working for 15 days or so each month, whereas most people work around 22 days, so you need to work significantly more hours a week than 35 when you are working to compensate for this (and this assumes that you are not working on a ship, etc. which doesn't allow for this test to be used).

Many people are under the mistaken belief that you can be not resident in the UK for tax purposes as long as you are in the UK for no more than 182 days in a tax year. If you hit 183 days then you definitely are UK-tax resident, but can also be so with well under this amount of time in the UK (in theory you can be resident with just 16 days in the UK in extreme circumstances).

I obviously don't know the exact circumstances for you, but I would be very surprised if you do not remain UK tax resident under the arrangement you outline above.

JRR23

Thank you very much for your help, Spidernick and TBC15. I didn’t think that I would be exempt. And you are correct, Spidernick, many people seem to think that you simply have to be out of the UK for half a year to be exempt! Even the agency that I have got the job through misinformed me on this one!

As for the conditions, no I am not working on a ship. The hours a day range from 12-15 a day, without a day off. So my hours range from 84 to 105 hours per week. Does this make any difference? (Or is it applied as an average over the month? In which case, it would only equate to between 21 and 26 hours per week)

TBC15, I think that I will exceed the 52 days in the UK before the end of the tax year. I’m happy to pay tax, (maybe happy isn’t the apt word here...who is actually happy to pay tax!?); however, this job takes me into the 40% tax bracket, which is just painful seeing how much tax is actually deducted in total over the year!

Thank you again for your help and thanks again in advance for any more questions of mine that you may answer!

Cook_County

Rotational workers are rarely non-UK resident. It is unclear why there is no Russian tax. Are you tax equalised or protected?