Working in Dubai - UK tax questions

[Fer]

A little bit of background. My company has recently made me redundant, due to "misplacing" a couple of large clients. Part of the work that would have kept me in the loop was a project in Dubai, which had been on hold for some time, and therefore could not serve as a stay of execution.

They have just offered me the work in Dubai at a day rate, and whilst it is only 30 days between now and January it would serve to keep the wolf from the door and just about keep me ticking over. The problem is I do not know the tax implications of doing this. The client will pick up flights and accomodation, pay me a subsistance for food in addition to my day rate, but I am not sure where I will stand regarding taxes.

Is there anyone with knowledge of this offer some advice for a newbie contractor, or point me in the right direction.

Thanks,
Chris

[Mon Ami Mate]

I worked in the Middle East for three years, including 18 months in Dubai. Set up an offshore bank account and have your salary paid directly into it. Gordon cannot then get his sticky fingers on your earnings.

[Eric Mc]

If you are resident in the UK, you are liable to pay UK tax. It does not matter if the money is remitted into the UK or not. If you are not resident in the UK you are NOT liable to UK tax. Whether you are resident in any given tax year depends on the number of days you spend in the UK. If you are going to be in Dubai for only 30 days, you will probably still be UK resident.

You could be taxed IN DUBAI (I'm not familiar with their taxation system) on this income too. However, the UK has double taxation agreements (DTA) with many countries which should prevent you from paying tax twice on the same income. Again, I do not know if there is a DTA in force between the UK and Dubai.

[Mon Ami Mate]

Eric Mc said:

If you are resident in the UK, you are liable to pay UK tax. It does not matter if the money is remitted into the UK or not. If you are not resident in the UK you are NOT liable to UK tax. Whether you are resident in any given tax year depends on the number of days you spend in the UK. If you are going to be in Dubai for only 30 days, you will probably still be UK resident. You could be taxed IN DUBAI (I'm not familiar with their taxation system) on this income too. However, the UK has double taxation agreements (DTA) with many countries which should prevent you from paying tax twice on the same income. Again, I do not know if there is a DTA in force between the UK and Dubai.

There is no tax in Dubai. However, you are absolutely right about the residential qualification - I forgot about this because I was permanently resident in the Middle East for three years.

[JamieBeeston]

Mon Ami Mate said:

However, you are absolutely right

Thats Erics Middle Name

[Eric Mc]

[Fer]

Thanks for the feedback, folks. Not the answer I wanted, but then again, I can't have everything I want, where would I put it!

Guess I need to try and find an umbrella company to cover this whilst I work away.

Thanks again,
Chris

[Eric Mc]

What would an umbrella company do for you that you couldn't do yourself?

[Fer]

As I mentioned earlier, I am a newbie to this lark, having survived the ax and managed to be a permie for years. Since it was only 30 days work over the next three or four months I did not know the merits of setting up myself for what will be a limited term.

Any advice to the contrary welcome, especially from someone with "Absolutely Right" as a middle name!

[Mon Ami Mate]

Fer said:

As I mentioned earlier, I am a newbie to this lark, having survived the ax and managed to be a permie for years. Since it was only 30 days work over the next three or four months I did not know the merits of setting up myself for what will be a limited term. Any advice to the contrary welcome, especially from someone with "Absolutely Right" as a middle name!

If you are working as a consultant you might get some benefit from setting up a company in DXB, with a bank account based there, and billing your client as a business, rather than an individual. I suspect this will remove the need to declare your personal earnings in the UK. I'm just not sure how you could then get the money out of your DXB company bank account into your UK personal one, without incurring unwelcome attention. But I bet Eric knows!

[Eric Mc]

I don't think that there is any legal way you could get your own hands on the money without having to make some declaration to the Inland Revenue. The only legal way would be to stay out of the UK long enough in the relevant tax year to claim non-residency status.