Our primary service is to work with foreign nationals in helping them to understand the UK tax system after relocating to the UK.
From there we use our expertise in tax mitigation to minimize the amount of tax payable.We pride ourselves in offering a tailored service in which we take the time to understand your personal circumstances. We use this knowledge when considering all aspects of your tax affairs in order to provide the best level of service and to ensure that the innovative opportunities we can offer are in line with your personal objectives.
Our background is in providing expatriate tax-planning and we therefore have vast experience in dealing with the tax authorities and developing innovations.
If you come to live in the UK permanently or to work for an extended period, or with no particular end date, you will become resident in the UK. However, if you are coming to the UK on holiday or for a short term period of work you will generally not be regarded as resident in the UK.
In most cases it will be clear whether you become resident in the UK, but sometimes it needs careful consideration of a number of factors. We would strongly advise that you take the necessary advice prior to your arrival to make sure that the necessary arrangements are in place to make your transition to the UK in the most tax efficient manner.
If you become UK resident in a particular tax year, by law you are resident for the whole of that tax year. But, if you come to the UK part way through a tax year, the year may by concession be split. While splitting the tax year into resident and non resident period, there may be some planning available where income earned during the non resident period is not taxable upon your arrival in the UK.
If you are coming to the UK to take up long term employment, you will be subjected to PAYE tax withholding on cash payments and certain benefits. You will be required to complete certain forms upon your arrival to make sure that the correct amount of PAYE is operating on your income. If you are self employed or in a partnership, there will be no PAYE deduction and you will have to report your income through the filing of a Self Assessment tax return.
We will provide you with our services to guide you through the process of completing all the necessary forms upon your arrival in the UK to familiarise yourself with the UK tax system.
If you are resident in the UK you are normally taxed on the “arising basis” which means that you will pay UK tax on all of your income as it arises and on your gains as they accrue, wherever that income and those gains are in the world. It is possible to be resident, and/or not domiciled in the UK. If at least one of these circumstances applies to you, you have a choice of whether to use the arising basis or the “remittance basis” of taxation.
There are many factors which will determine whether you are resident in the UK, and it is not simply a question of the number of days you are physically present in the UK during a tax year, although this is an important consideration. If you are in the UK for 183 days or more in a tax year, you are resident in the UK and there are no exceptions to this.
You can also be regarded as resident in the UK if you are present here for fewer than 183 days in a tax year. This will depend on how often and how long you are in the UK, the purpose and pattern of your presence and your connections to the UK. These might include the location of your family, your property, your work life and your social connections.
If you are UK resident non-UK domiciled, you may claim the remittance basis of taxation for your foreign income. There are several tax strategies that may be available to individuals moving to the UK which can significantly reduce the liability to UK tax.
In general, tax savings can be made for individuals who are assigned to the UK by an overseas employer for a period of up to 2 years or intend to remain in the UK for less than 3 years and will have business trips outside the UK.
Whether or not you are domiciled in the UK is generally relevant if you have foreign income or gains during a tax year. If you do not have foreign income and/or gains then your domicile status has no bearing on your UK Income Tax or Capital Gains Tax position and you do not need to consider it.
If you are born in the UK, have lived here for most of your life or now living here permanently gives a good indication that you might be domiciled in the UK. However, domicile is a complex area and if your tax affairs are complex, we would recommend that you speak to us so that we can give you more accurate advice.
An individual can also claim non-domicile status if this is beneficial and individuals who do not intend to remain in the UK permanently are likely able to claim non-domicile status. An individual who is not domiciled in the UK will usually only pay UK tax on overseas investment income and gains to the extent that the income or gains are remitted to the UK.
The first thing to note is that not everyone in the UK is required to file an annual tax return. If your tax affairs are straightforward you may already pay all of the tax due on your earnings or pensions through your tax code. But you may need to complete a tax return if you have more complicated tax affairs, even if you already pay tax through your tax code.
You will find some of the cases below where a Tax Return filing is required.
– Anyone earning more than £100,000 in a tax year
– All self-employed taxpayers or a partner in a partnership
– Taxpayers claiming non-resident, not ordinarily resident, or non-domicile status
– Anyone that has been issued with a tax return
– Any individual that has not had full withholding at source
– Anyone receiving foreign income and filing under the arising basis
– A company director or a trustee
– You or your partner receive Child Benefit and your income is over £50,000
The UK has a self-assessment system which means that a taxpayer will prepare and submit their tax return without any backup, such as interest statement or dividend statement. If a taxpayer wants HMRC to calculate their tax or is completing a “paper return”, they must submit their tax return by 31 October following the tax year end. In other cases, the return must be filed electronically by 31 January following the tax year end. There are no requirements for our ability to file extensions and an automatic penalty of £100 will apply for late filing. The later you send your return, the more penalties you’re likely to pay.
The full amount of any tax due must also be settled by 31 January following the tax year end to avoid any interest or potential surcharges. In addition, if a taxpayer has significant income not taxed at source, there will be payments on account generated and these payments will also be due on 31 January and the following 31 July.
Following the submission of a tax return, HMRC has 12 months either from the filing date or a year from the filing deadline to open an “inquiry”. This may consist of a few questions or they may request a full breakdown of information and additional details. You will find more information on inquiries on our “HMRC inquiry section”.
We have our specialist tax team who can assist you with the tax return filing process and they would be able to have an initial discussion at no cost to identify your filing requirements.
If you emigrate from the UK you will stop being resident in the UK. This would mean that you leave, set up home elsewhere, and substantially cut your ties to the UK. However, if you leave for shorter periods, for occasional residence abroad, or with no settled purpose abroad, it is likely that you will remain resident in the UK, even if you become resident in another country under that country’s rule.
If you are leaving the UK under a full-time employment contract you will become nonresident if you expect to be absent from the UK either for at least a complete tax year. If you are moving abroad for another purpose, you would only be considered non-resident if the absence is expected to last for at least 3 years and there are no immediate plans to return.
You must complete the relevant form upon your departure from the UK so that HMRC can assess whether you will need to complete any tax return after your departure. It is now very important to receive the recommended advice prior to the departure to avoid being resident in more than one jurisdictions for tax purposes.
You may still have some UK tax reporting as a nonresident taxpayer such as UK investment income, gain on sale of UK assets owned at departure, future stock vesting which relates to UK employment. Again careful planning and necessary advice are required to maximize any tax savings.
We have our sister company set up where we specialize in international and cross border taxes and we believe that an initial discussion with a member of our tax team can make a difference and create some potential tax savings.
Being enquired into or being under investigation by HMRC can be a daunting, stressful and lengthy process. Frontier can act on behalf of its members and deal directly with HMRC to get their inquiries concluded as quickly and efficiently as possible.