Been offered contractor position in Middle East

[AlanDavis]

Hi all, my first time here (and first time as a potential contractor).

I tried to find the answer through search to avoid any flaming, but my humble efforts failed me - sorry.

I was made redundant last week (in the UK) and today been told that a middle east company (in the UAE) will give me a 6-month contract. They will pay for all my expenses (hotel, flights and food) when in the UAE. I will spend about 50% of my time working remotely (from the UK) - although, I will do 100% of work abroad and use the 50% time in UK to spend with my family.

I have a friend who works for this organisations, but he has moved to the UAE permanently - essentially it is the same contract as his.

He said that they will pay direct into my bank account, with no need to set up a company etc.

The question I have is, what should I do to be tax-efficient? Would it be wise to open an offshore account? i.e. all money will be earned and kept overseas?

I am happy to pay for the advice, but need to make a quick decision as I will be signing the contract over the next day or so.

Thanks for the help - and sorry for asking what's probably a very common question.

[contractreviews.co.uk]

Hi Alan Davis,

The law says that you must pay taxes in your country of residence.

Since you will only be working in the UAE for less then 6 months, you will therefore be liable to pay taxes on your foreign income in the UK.

But, there is some very good news. As there are no taxes or SS in the UAE you will earn what they give you.

As for the account, you could open an off shore account. As you will be spending some time there it may be actually convenient for you to do so.

However, unless you are a non domiciles UK resident and intend to keep your income out of the country, HMRC will require you to declare your foreign income.

I hope that this helps.

Mardi

[Fred Bloggs]

There's lots of information and fairly concise guides in HMRC website. Good that they are paying all your costs because rental cost etc.. in UAE in simply insane. Good luck, I've followed up on a few opportunities in the UAE lately but so far had no luck. From what you have said, it seems likely you will pay UK tax, the info on HMRC website is pretty clear on this.

[AlanDavis]

Thanks for the replies.

Just a hypothetical question - if I opened a local account in the UAE, and got paid into that account, how would the taxman in the UK find out? I wouldn't risk it, but I am sure some people have found a way around it.

[AZZIK]

There's lots of information and fairly concise guides in HMRC website. Good that they are paying all your costs because rental cost etc.. in UAE in simply insane. Good luck, I've followed up on a few opportunities in the UAE lately but so far had no luck. From what you have said, it seems likely you will pay UK tax, the info on HMRC website is pretty clear on this.

Where do people look for jobs in the UAE? Jobserve? Or are there specific sites you need to register to?

[BlasterBates]

I don't know your circumstances, but if there is a chance for a longterm contract more than a year, you may be able to stay away from the UK long enough for it to be tax free. This would definitely be worth considering.
I don't know how long that would be. But once you've deregistered, i.e. send a letter to the authorities that you're no longer resident it won't be taxable.

You can return to the UK for 183 days in any one year and over a longer time period (2 years or more) no more than 90 days on average. So in your first year you could still spend time with your family, and if it pans out take them with you on the second year.

Well done, sounds like a great contract.

If you were to stay in the UK, I would set up as a Ltd and get an accountant to handle it. I would see IR35 as a non-issue, as you would be working in UAE.

[MPwannadecentincome]

Thanks for the replies.

Just a hypothetical question - if I opened a local account in the UAE, and got paid into that account, how would the taxman in the UK find out? I wouldn't risk it, but I am sure some people have found a way around it.

I hope your real name is not Alan Davis!

[BlasterBates]

Thanks for the replies.

Just a hypothetical question - if I opened a local account in the UAE, and got paid into that account, how would the taxman in the UK find out? I wouldn't risk it, but I am sure some people have found a way around it.

They wouldn't know about your UAE account, but they may get suspicious if you have no income and live in a large house. They would then enquire, and might even get to look at transfers into your bank account, or just look at what you're spending. In other words no they can't find your UAE account but they would locate the money being transferred back to the UK.

[Fred Bloggs]

I'm not in IT but I use sites like "Oil Careers" and "Oil and Gas Job Search" Google for them. I "think" they might be mainly engineering biased sites though (I really don't know TBH)?

IMO, there is a huge proportion (majority?) of jobs that go to lower cost nationals. Myself and other guys I know, are really struggling to get anywhere with this. One mate has been bombarding websites/agencies/networking/linkedin etc for 9 months now with no success and he has a pretty strong O&G/Middle East CV.

[AlanDavis]

I didn't use any search engines, but went through some personal contacts.

How does HMRC check you have been out of the UK for more that 183 days? Do they have access to records at the immigration service/UK Borders Agency?

I am look at setting up a Ltd company. When I sign the contract with the UAE company, does that contract need to be between me and them or the Ltd company and them? Sorry for the basic questions, its just that I need to move fast on this...thanks