Client Stories
2. UK Residency Planning for an Overseas Contract in the UAE
A retired UK client approached us after accepting a contract to work in the UAE. Before leaving the UK, they checked their plans with their existing accountant and were advised to rely on HMRC’s online residency calculator. Based on the calculator, they believed that spending fewer than 90 days in the UK would ensure non-UK residence.
Five months into the contract, the client had relocated to the UAE alone, leaving their family in the UK, and was travelling back and forth. At this point, they became concerned and sought specialist UK residency advice.
We carried out a full Statutory Residence Test analysis, including a detailed UK day count, review of UK ties, and application of the split year rules. Crucially, HMRC states that its residency calculator should not be relied upon, and in this case, a single misunderstood answer had produced a misleading result.
Our review showed that if the client had continued as planned, they would have remained UK tax resident. This would have meant paying UK income tax on their overseas earnings, significantly reducing the value of the contract. In practical terms, the client would have spent months working overseas away from their family, only to return with little more than half of the income they were expecting after UK tax.
This case highlights a common issue for UK contractors working overseas. Without proactive UK expat tax advice, individuals can remain incorrectly taxed in the UK for years, often without realising they are entitled to substantial refunds.
UK/UAE Expat Tax Refund (£80,000 Reclaimed)
A UK/UAE expat who was working overseas for a large multinational company contacted us after realising they were still paying UK income tax on their overseas employment income. Despite living and working full time outside the UK, no advice had been provided by the employer on UK tax residence or overseas working rules, and UK tax continued to be deducted.
We carried out a full UK tax residency review using the Statutory Residence Test. This included analysing where the client performed their duties, their pattern of work, and their time spent in the UK. Our assessment confirmed that the client was non-UK resident and that all employment duties were carried out overseas. As a result, the income should not have been subject to UK tax.
We formally notified HMRC that the client had left the UK to work full time overseas and submitted a detailed claim to recover the tax incorrectly paid. HMRC accepted the position in full, and the client received a refund of approximately £80,000.
We designed a clear residency planning strategy to secure non-UK residence and ensure the overseas income was not taxed in the UK. While the plan required difficult personal decisions, including the possibility of an additional year overseas, it protected the client’s earnings in full and preserved their retirement nest egg.
This case demonstrates why early UK tax residency advice is critical for anyone planning to work overseas. Online tools and assumptions are not a substitute for a proper statutory analysis, and small errors can result in very large UK tax bills.