Advise on Contracting in Singapore and HongKong

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Hi,

There are quite a few threads on contracting in Europe but not really in Singapore and hong Kong. I am currently contracting via a Ltd in the UK and have won a contract to work in both Singapore and Hong kong for 6 months (possible extendable to 1 year.)

I will be paid in SGD by the client's Singapore branch. I will however be required to work in HK for the first 3 months and the remianing in Singapore.

I am hoping to make full use of the tax efficiency of Singapore. I will eventaully get expert tax advise but at this point, I want to get a feel of what is the possible tax burdens/scenarios.

1. Contracting in Singapore? Does that have to be via ltd(local obviously) or is there sucha thing as umbrella there?
2. Given the above scenario, I would want to be tax resident in Singapore. The criteria is 182 days, would my 3 months in HK count towards work in singapore?
3. Given <3months in HK, I am truly exempt from HK tax?
4. Any expat or International contractors used Tax advisers that they will recommend? specialising mainly in APAC.



Thanks again!

[Fred Bloggs]

If you are UK tax resident today then if you leave tomorrow and you return in 1 years time you will pay UK tax on your earnings with relief given for any tax already paid in SG and HK but you need to check details of taxation agreemets between UK and those countries. It is not possible, as far as I am aware, to avoid paying UK tax in this situation (legally).

[Gonzo]

I am hoping to make full use of the tax efficiency of Singapore.

Unfortunately it is not so easy to shake off your UK tax residency, if that's what you have at the moment. You have to permanently leave the UK. EDIT 2 - Permanent is not quite the right word (we're only talking about residence here and not domicile) but you have to tell HMRC that you are leaving for at least a complete tax year.

Assuming that you are a company director then you already have to submit a Self Assessment tax return. If you tell HMRC that you are permanently leaving the UK (form P85) they may accept that you cease to be resident in the UK (and liable for UK tax) from the day that you leave but they will still require the SA tax return. There is a residency section that will have to be completed where you tell them how many days that you spent in the UK and the number of visits that you made since the date that you permanently left. It is this information that will determine whether you are really non-resident.

I permanently left the UK over two whole tax years ago and am not liable to UK tax on my overseas income (and I have no UK income) but HMRC still want a SA tax return from me for the 2010/2011 tax year.

Mrs Gonzo on the other hand was a PAYE permie. She submitted her P85, got her tax refund and has never heard anything from them again.

EDIT

The FAQ section on the HMRC website is here HM Revenue & Customs: Non-residents: frequently asked questions

The important bit is that if you are present in the UK for 183 days in a tax year then you are tax resident, there are no exceptions to this. Even if you spend less than 183 days in the UK you could still be considered tax resident.