UAE contract tax accounting

**Drewster** · 2 May 2010, 19:14

Originally posted by triwhdxk View Post

i have always worked on contract roles in UK through my own limited company (registered in UK) for the past couple of years. I have never worked outside UK.

Currently, I have been nearly offered (not confirmed yet) a contract role in UAE for 6-8 months. So a little bit confused how should I handle this contract if it gets offered. The agency can draw contracts from UK or from UAE.

1) If I work through my UK limited company than my feeling is that I can charge VAT on invoices and pay the normal corporation tax etc. and go around the usual business. Is this correct?

2) Are there any other tax efficient ways of doing this like offshoring etc.

Appreciate your help.

kashif

You can certainly do 1 - ie Invoice a UK Company from YourCo and add VAT as "normal".

If you are getting expenses - add them to the Invoice and charge VAT on them as well.......

If you are going to be there longer term you might be able to be non-resident (in UK) and not have to pay UK taxes etc...... but you would obviously have to:
a) Invoice/Charge via another Vehicle.
b) Investigate (seek profesional advice) Tax / non-residence / timing / limits etc.

Slightly off topic (but hopefully helpful) be careful about living expenses.... You hear of people getting a "good rate" but having to find their own accomodation (with no idea how much it costs)...... or getting a rate plus "xxxxx" accomodation allowance - where "xxxxx" doesn't equate to a decent place to live.... and even "help" with accomodation - meaning "here are some phone numbers - off you go".

**Fred Bloggs** · 3 May 2010, 08:44

Don't underestimate how much it costs to live in UAE. And beware deals where the client provides the accommodation. A bloke I know very well got the accommodation but it was in an area where all the residents were Bangladeshis, Sri Lankans etc... Not that I have anything against these folks but he was not anywhere near where western expats lived or socialised and it made life very difficult. It is getting a lot more difficult to work tax free now the latest cases brought by HMRC have shown and rates are nothing like as good as they used to be.

**triwhdxk** · 4 May 2010, 20:37

thanks for the responses. do i have to declare my self non-resident etc while I am providing my serivces through my UK ltd company outside UK.

does anyone can recommend good tax companies who can help in exploring other tax efficient methods.

**Punter** · 5 May 2010, 04:54

Originally posted by triwhdxk View Post

thanks for the responses. do i have to declare my self non-resident etc while I am providing my serivces through my UK ltd company outside UK.

I've been looking into this. Form P85 is the one you need, but to get non-resident status is more difficult now than filling in a form and staying out of the country for a complete tax year. It's now negotiable based on your circumstances and is even more difficult when you are being paid by a UK company of which you are a director. This article is relevant. (I have no connection with this company, it's just a good summary of the position.)

**BlasterBates** · 6 May 2010, 09:50

Originally posted by triwhdxk View Post

i have always worked on contract roles in UK through my own limited company (registered in UK) for the past couple of years. I have never worked outside UK.

Currently, I have been nearly offered (not confirmed yet) a contract role in UAE for 6-8 months. So a little bit confused how should I handle this contract if it gets offered. The agency can draw contracts from UK or from UAE.

1) If I work through my UK limited company than my feeling is that I can charge VAT on invoices and pay the normal corporation tax etc. and go around the usual business. Is this correct?

2) Are there any other tax efficient ways of doing this like offshoring etc.

Appreciate your help.

kashif

The main thing is be compliant with UAE rules, even if that means no tax. Then declare this a s foreign personal income. This means you'll be completely exempt of IR35. You'll be taxed taking into account tax paid in the UAE.

I wouldn't see any advantage in going through your UK Ltd. But you need to take advice.

Think "I'm a UAE resident" but with the obligation to declare this in the UK. It isn't UK income as such.

Your priority should be making sure you don't break any rules in the UAE not in the UK, which is a "secondary" priority. If you leave the UK entirely then it would only be taxable in the UAE. That means filling out a form, but also making sure you really are non-resident.

**Fred Bloggs** · 6 May 2010, 19:27

Originally posted by BlasterBates View Post

The main thing is be compliant with UAE rules, even if that means no tax. Then declare this a s foreign personal income. This means you'll be completely exempt of IR35. You'll be taxed taking into account tax paid in the UAE.

I wouldn't see any advantage in going through your UK Ltd. But you need to take advice.

Think "I'm a UAE resident" but with the obligation to declare this in the UK. It isn't UK income as such.

Your priority should be making sure you don't break any rules in the UAE not in the UK, which is a "secondary" priority. If you leave the UK entirely then it would only be taxable in the UAE. That means filling out a form, but also making sure you really are non-resident.

Yes, well, the bit in bold is getting a lot more difficult to acheive. As I read it now, following a couple of recent HMRC cases- If you have property in the UK thats not long term rented out, or dependant family here, or a bank account, or a doctors registration, or club memberships, or anything like this then Hector will bill you for UK tax. You have to really, genuinely, leave the UK now I think. To be honest though, it's no bad thing. If you or your family use UK public services, you should pay towards the funding of them, no?

UAE contract tax accounting