Hello HMRC,
I am a UK national and a consultant living in England providing design services through my own Ltd company (company registered in UK since 2011, vat registered, 1 person company, I’m the director). I have been offered a fully remote outside IR35 contract that will be executed by me via my company, beginning April 2024. I was thinking of using the digital nomad visas offered by tax free countries esp. Dubai, for maybe upto 2 FY. If I were to move to Dubai, I would have no ties with the UK except for my company.
I wanted to understand the following:
1. Will I be non-resident in UK for purpose of taxation, given that I will have no family/home ties with UK, be in UK for less than 30 days; however, all the work I will be doing from Dubai (min 40 hrs/week), will be for my UK company, which in turn is working for a UK client. Does my being the company director change anything, like number of days for UK ties? What is the number of days allowed in UK to be non-resident, as a company director? Is it still 16 days for automatic ties test or reduces to 0? What do I have to do be non-resident as a company director of a UK company working for my company?
2. If I’m classed as non-resident, will the dividends/ salary drawn by me from my company be taxable in UK? If no, then do I need to declare them on my self-assessment?
3. What happens to NI? Employers NI has to be paid by my company?
4. So far I have understood that upon leaving I will need to complete a P85 form and upon becoming a resident of Dubai apply for a NT tax code. Is that correct? Anything else I need to do?
5. I have a flat that I will rent out, rental income will be filed in my self-assessment & taxed in UK. My company will pay corporation tax, vat as usual. Correct?
6. Income from stocks (companies in USA, EU, UK etc) held in my UK demat account: dividends/Capital gains as well as any UK interest income will also not be taxable in UK? If no, then do I need to declare them on my self-assessment?
7. I have accounts in India (I'm born in India & I think domiciled in India), Income from stocks (companies in India) held in my India demat account: dividends/Capital gains as well as any interest income earned in India will also not be taxable in UK? If no, then do I need to declare them on my self-assessment?
8. Does anything change if I’m back in 2 FY? HMRC website, talks about temporary non-residents, if back in less than 5 FY. Would that mean that tax on salary/dividends from my UK company would have to be paid before returning? What about other income heads: stocks in UK demat account? I assume that foreign income i.e. earned in India would still be exempt?
I have tried to get information from two accountants but have received conflicting advice. According to my accountant, I will be non-resident & hence except rental income in UK, everything else is outside UK tax. However, a colleague in similar position has been advised by his accountant, that the salary/dividend from my UK company would be taxable in UK, as the work is done through a UK company & as I’m the director of the company, even one day in the UK puts me in UK tax range, he wasn’t sure what happens if 0 days are spent in UK!
I would be very grateful, if HMRC could provide an answer to this, as I’m sure there must be many in my situation & there is confusing / conflicting advice available.
