What does "absent from the UK for at least a whole tax year" actuallymean?


P

PeterSaxton

A taxpayer left the UK in 2006-2007 intending to work abroad for
several years.

She returned to the UK for about 10 days in 2007-2008 tax year.

She returned to the UK on 11 April 2008 and started work in the UK on
13 April 2008.

The HMRC booklet: Residence, Domicile and the Remittance Basis

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

"8.5 Leaving the UK to work abroad as an employee
If you are leaving the UK to work abroad full-time, you will only
become
not resident and not ordinarily resident from the day after the day of
your
departure, as long as:
• you are leaving to work abroad under a contract of employment for at
least a whole tax year
• you have actually physically left the UK to begin your employment
abroad
and not, for example, to have a holiday until you begin your
employment
• you will be absent from the UK for at least a whole tax year
• your visits to the UK after you have left to begin your overseas
employment will
- total less than 183 days in any tax year, and
- average less than 91 days a tax year. This average is taken over the
period of absence up to a maximum of four years – see 8.3 which will
show you how to work out this average. Any days you spend in the UK
because of exceptional circumstances beyond your control, for example
an illness which prevents you from travelling, are not normally
counted
for this purpose.
If you do not meet all of these conditions, you will remain resident
and
ordinarily resident in the UK unless paragraph 8.2 applies to you.
If your employment comes to an end and you do not return to the UK it
will
be necessary to consider if you continue to be not resident and not
ordinarily resident in the UK."

A11. Residence in the United Kingdom: year of commencement or
cessation of residence

http://www.hmrc.gov.uk/manuals/senew/se42850.htm

"The Income and Corporation Taxes Acts make no provision for splitting
tax years in relation to residence and an individual who is resident
in the United Kingdom for any year of assessment is chargeable on the
basis that he is resident for the whole year.
But where an individual:

comes to the United Kingdom to take up permanent residence or to stay
for at least two years, or
ceases to reside in the United Kingdom if he has left for permanent
residence abroad,
liability to United Kingdom tax which is affected by residence is
computed by reference to the period of his residence here during the
year. It is a condition that the individual should satisfy the Board
of Inland Revenue that prior to his arrival he was, or on his
departure is, not ordinarily resident in the United Kingdom. The
concession would not apply, for example, where an individual who had
been ordinarily resident in the United Kingdom left for intended
permanent residence abroad but returned to reside here before the end
of the tax year following the tax year of departure.
This concession is extended to the years of departure and return
where, subject to certain conditions, an individual goes abroad for
full time service under a contract of employment. These conditions
are-

the individual absence from the United Kingdom and the employment
itself both extend over a period covering a complete tax year, and
any interim visits to the United Kingdom during the period do not
amount to
183 days or more in any tax year, or
an average of 91 days or more in a tax year (the average is taken over
the period of absence up to a maximum of four years, and
for years up to and including 1992-93, all the duties of the
employment are performed abroad or any duties the individual performs
in the United Kingdom are incidental to duties abroad.
Where the concession applies and the tax year is split, Section 128
Finance Act 1995 (limit on income chargeable on non-residents: Income
Tax) does not apply for the period for which an individual is treated
as not resident. That Section only applies to complete years of non-
residence."

My view is that "the individual absence from the United Kingdom and
the employment itself both extend over a period covering a complete
tax year" means the taxpayer should not visit the UK in the tax year
but when I phone HMRC they seem to think that spending 10 days in the
UK in the tax year still counts as absence from the UK!

Can anybody shed any light on this?
 
R

Ronald Raygun

PeterSaxton said:
My view is that "the individual absence from the United Kingdom and
the employment itself both extend over a period covering a complete
tax year" means the taxpayer should not visit the UK in the tax year
but when I phone HMRC they seem to think that spending 10 days in the
UK in the tax year still counts as absence from the UK!

Can anybody shed any light on this?
I would interpret "individual absence" as a period when the person
*resided* abroad, as opposed to physically being away for the entire
duration. Therefore spending a few (as many as 182, apparently)
days visiting the UK during a prolonged absence would not convert
this into two individual absences.

But, if you're looking for vague bits, what does the following mean?
? you are leaving to work abroad under a contract of employment for at
least a whole tax year
Does it mean the contract needs to be in place before you leave?
Does it mean the contract must be for at least a year's work, or
does the "at least for" apply only to the leaving? What if you leave
for a two month contract hoping for it to be extended or for other
opportunities of work to arise? And why does there need to be a
contract of employment? What if you leave to work on a self-employed
basis?
? you will be absent from the UK for at least a whole tax year
Does this mean that you *expect* at time of leaving that the absence
will last that long, or does it mean that only once it has in fact
lasted that long will you retrospectively count as having been
absent from the date of leaving?
 
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P

PeterSaxton

I would interpret "individual absence" as a period when the person
*resided* abroad, as opposed to physically being away for the entire
duration.  Therefore spending a few (as many as 182, apparently)
days visiting the UK during a prolonged absence would not convert
this into two individual absences.
I've not considered absence to relate to residence in the situation
where you are deciding residence based on absence!

The guidance says: "If you do not meet all of these conditions" but
then they appear to ignore one condition if you satisfy other
conditions!

Total madness.
But, if you're looking for vague bits, what does the following mean?


Does it mean the contract needs to be in place before you leave?
Yes, otherwise you are leaving on mere speculation.
Does it mean the contract must be for at least a year's work, or
does the "at least for" apply only to the leaving?
It applies to the employment otherwise they would have said: "you are
leaving for at least a whole tax year to work abroad under a contract
of employment"
 What if you leave
for a two month contract hoping for it to be extended or for other
opportunities of work to arise?
I don't think HMRC place much reliance on "hope"!
 And why does there need to be a
contract of employment?  What if you leave to work on a self-employed
basis?
8.8 Leaving the UK to become self-employed abroad
If you are leaving the UK to work abroad for yourself in a trade,
profession
or vocation, then as long as your working circumstances are similar to
those
outlined in paragraph 8.5, you will be taxed in the same way.
Does this mean that you *expect* at time of leaving that the absence
will last that long, or does it mean that only once it has in fact
lasted that long will you retrospectively count as having been
absent from the date of leaving?
You need evidence to support your absence from the UK for at least a
whole tax year, eg. contract of employment, etc.

If you can't provide sufficient evidence you would apply
retrospectively.
 
A

Alan Ferris

My view is that "the individual absence from the United Kingdom and
the employment itself both extend over a period covering a complete
tax year" means the taxpayer should not visit the UK in the tax year
but when I phone HMRC they seem to think that spending 10 days in the
UK in the tax year still counts as absence from the UK!
No, see 8.3 and the 91 day average rule

--
Ferrit

()'.'.'()
( (T) )
( ) . ( )
(")_(")
"I always babble nonsense to people"
Patrick Barker
 
P

PeterSaxton

No, see 8.3 and the 91 day average rule
I understand there are other conditions but IR20 says: "If you do not
meet all of these conditions, you will remain resident
and ordinarily resident in the UK "

Why do they ignore the absent from UK condition?
 
A

Alan Ferris

I understand there are other conditions but IR20 says: "If you do not
meet all of these conditions, you will remain resident
and ordinarily resident in the UK "

Why do they ignore the absent from UK condition?
They don't, they tell you what they classify as an absence and how
much time can be spent in the UK. What is it you fail to grasp about
splitting years?

--
Ferrit

()'.'.'()
( (T) )
( ) . ( )
(")_(")
"I always babble nonsense to people"
Patrick Barker
 
P

PeterSaxton

They don't, they tell you what they classify as an absence and how
much time can be spent in the UK.
Where do they say what they class as an absence? I assume you will get
this wrong because you don't have a clue but go ahead.
 What is it you fail to grasp about
splitting years?
I understand about splitting years. I am talking about "absence" from
the UK.
 
A

Alan Ferris

Where do they say what they class as an absence? I assume you will get
this wrong because you don't have a clue but go ahead.
Try reading again 8.3 where they clearly state how many days you can
spend in the UK and be considered absent.
I understand about splitting years. I am talking about "absence" from
the UK.
--
Ferrit

()'.'.'()
( (T) )
( ) . ( )
(")_(")
"I always babble nonsense to people"
Patrick Barker
 
P

PeterSaxton

Try reading again 8.3 where they clearly state how many days you can
spend in the UK and be considered absent.
8.3 explains how you calculate average visits to the UK. Average
visits are referred to in a separate condition:

"average less than 91 days a tax year. This average is taken over the
period of absence up to a maximum of four years – see 8.3 which will
show you how to work out this average. Any days you spend in the UK
because of exceptional circumstances beyond your control, for example
an illness which prevents you from travelling, are not normally
counted for this purpose."

Nobody else has disagreed with me and you can't raise anything of
relevance so because you don't seem to understand I will summarise the
problem.

One of the conditions states: “you are leaving to work abroad under a
contract of employment for at least a whole tax year”

All of the conditions are relevant because of: “If you do not meet
all of these conditions, you will remain resident and ordinarily
resident in the UK”

Given the condition at the top refers to working abroad for at least a
whole tax year, what does this condition add?: “you will be absent
from the UK for at least a whole tax year”

Surely that must refer to physical absence otherwise it is covered in
the condition at the top and therefore unnecessary.
 
A

Alan Ferris

8.3 explains how you calculate average visits to the UK. Average
visits are referred to in a separate condition:

"average less than 91 days a tax year. This average is taken over the
period of absence up to a maximum of four years – see 8.3 which will
show you how to work out this average. Any days you spend in the UK
because of exceptional circumstances beyond your control, for example
an illness which prevents you from travelling, are not normally
counted for this purpose."

Nobody else has disagreed with me and you can't raise anything of
relevance so because you don't seem to understand I will summarise the
problem.

One of the conditions states: “you are leaving to work abroad under a
contract of employment for at least a whole tax year”

All of the conditions are relevant because of: “If you do not meet
all of these conditions, you will remain resident and ordinarily
resident in the UK”

Given the condition at the top refers to working abroad for at least a
whole tax year, what does this condition add?: “you will be absent
from the UK for at least a whole tax year”

Surely that must refer to physical absence otherwise it is covered in
the condition at the top and therefore unnecessary.
No. For I could be leaving to work abroad for the tax year, but
return for every weekend and other days as long as I do not exceed the
186 days I am considered absent. This was clearly pointed out to you
on Accountancy web....why did you not grasp it then?

--
Ferrit

()'.'.'()
( (T) )
( ) . ( )
(")_(")
"I always babble nonsense to people"
Patrick Barker
 
P

PeterSaxton

No.  For I could be leaving to work abroad for the tax year, but
return for every weekend and other days as long as I do not exceed the
186 days I am considered absent.   This was clearly pointed out to you
on Accountancy web....why did you not grasp it then?
Yet again you fail to answer the question. You must be too stupid to
understand.

What does the condition "you will be absent from the UK for at least a
whole tax year" add to the list of other conditions?

You don't seem to understand the difference between how HMRC use the
split year rules and their own published guidance.

Nobody on AccountingWEB - to give the website it's correct name -
maybe you have difficulty with words? - has explained why HMRC use the
rules differently from their own published guidance either.

Let's make it simple. What about this list of rules?

1. You have to be over 18,
2. You have to be under 65, and
3. You cannot be 12.

All of the above rules have to be met.

Rule 3 is irrelevant because it is covered by rule 1.

Let us call the following condition rule 1: “you are leaving to work
abroad under a
contract of employment for at least a whole tax year”

Let us call the following condition rule 2: "you will be absent from
the UK for at least a whole tax year"

What does rule 2 add to rule 1?

Exactly, all you logical people out there can see that rule 2 adds
nothing unless absent means you cannot return even for holidays. If
you could return for holidays then rule 1 is sufficient.

Ferrit, your brain is obviously not designed for understanding the
above. I expect a: "But this goes to 11" statement now.
 
A

Alan Ferris

Yet again you fail to answer the question. You must be too stupid to
understand.

What does the condition "you will be absent from the UK for at least a
whole tax year" add to the list of other conditions?

You don't seem to understand the difference between how HMRC use the
split year rules and their own published guidance.

Nobody on AccountingWEB - to give the website it's correct name -
maybe you have difficulty with words? - has explained why HMRC use the
rules differently from their own published guidance either.

Let's make it simple. What about this list of rules?

1. You have to be over 18,
2. You have to be under 65, and
3. You cannot be 12.

All of the above rules have to be met.

Rule 3 is irrelevant because it is covered by rule 1.

Let us call the following condition rule 1: “you are leaving to work
abroad under a
contract of employment for at least a whole tax year”
It allows for you working abroad and allows split tax year treatment
if you can answer you will be gone for a full year.
Let us call the following condition rule 2: "you will be absent from
the UK for at least a whole tax year"

What does rule 2 add to rule 1?
You now do not have to be leaving for employment, you may have left
for any reason. Rule added at law change.
Exactly, all you logical people out there can see that rule 2 adds
nothing unless absent means you cannot return even for holidays. If
you could return for holidays then rule 1 is sufficient.
Rule 1 only covers those employed abroad. Not those who are not
employed but overseas anyway.
Ferrit, your brain is obviously not designed for understanding the
above. I expect a: "But this goes to 11" statement now.
No it is clear you have the problem.

--
Ferrit

()'.'.'()
( (T) )
( ) . ( )
(")_(")
"I always babble nonsense to people"
Patrick Barker
 
R

Ronald Raygun

PeterSaxton said:
Let us call the following condition rule 1: ?you are leaving to work
abroad under a
contract of employment for at least a whole tax year?

Let us call the following condition rule 2: "you will be absent from
the UK for at least a whole tax year"

What does rule 2 add to rule 1?

Exactly, all you logical people out there can see that rule 2 adds
nothing unless absent means you cannot return even for holidays. If
you could return for holidays then rule 1 is sufficient.
I don't think so. What does rule 1 mean?

For one thing, it depends on what it means by "to". :)

Yes, really. It could mean "with the intention of". If so, it's easy
to answer your question: Rule 1 requires that you *intend*, at the time
you leave, to work abroad for the stated time, to which rule 2 adds that
you are *in fact* absent for that long.

Of course "to" could simply mean "in order to", but we still need
to analyse the wording to see what exactly the phrase "for at least
a whole tax year" attaches to. There are three possibilities:
(1) leaving, (2) working, (3) the contract. Case 3 boils down to
the same issue of intent already mentioned, given that contracts can
be broken or renegotiated. Case 1 seems to be the one which aligns
with your interpretation that rule 2 would add nothing, however I
think case 2, or perhaps a combination of 2 and 3, is likeliest:

You leave in order "to work for .. a .. year". There is still an
implication of intent because once you've actually left, the nature
of the work under the contract is subject to change (the new employer
could transfer you to a UK office), or the terms of the contract could
be renegotiated (e.g. its duration shortened), or you could resign
or get fired.

So we are still stuck with the interpretation that rule 1 might
imply only an intention of absence, and rule 2 adds that there must
be actual absence. Rule 2 cannot therefore be taken to imply that
the absence must be total to the extent that under no circumstances
must you set foot on UK soil for the entire duration of the "absence",
and so it is natural to apply the definition of "absence" given
elsewhere in the rules also to its use within rule 2, i.e. that the
absence admits a limited amount of presence.

In any case, even if you do in fact *work* exclusively abroad, you're
not going to be working 7/52, and there is no earthly reason why the
tax rules should wish to prevent you spending your holidays in the UK.
 
R

Ronald Raygun

Alan said:
It allows for you working abroad and allows split tax year treatment
if you can answer you will be gone for a full year.


You now do not have to be leaving for employment, you may have left
for any reason. Rule added at law change.
This is incorrect. Your interpretation applies rule 1 OR rule 2,
but the context requires that rule 1 AND rule 2 must apply.
 
A

Alan Ferris

This is incorrect. Your interpretation applies rule 1 OR rule 2,
but the context requires that rule 1 AND rule 2 must apply.
You can leave with the intent to work under contract for the whole
year. However that contract may cease and you may still stay abroad
without that employment.

--
Ferrit

()'.'.'()
( (T) )
( ) . ( )
(")_(")
"I always babble nonsense to people"
Patrick Barker
 
R

Ronald Raygun

Alan said:
You can leave with the intent to work under contract for the whole
year. However that contract may cease and you may still stay abroad
without that employment.
Agreed.
 
P

PeterSaxton

I don't think so.  What does rule 1 mean?

For one thing, it depends on what it means by "to".  :)

Yes, really.  It could mean "with the intention of".  If so, it's easy
to answer your question:  Rule 1 requires that you *intend*, at the time
you leave, to work abroad for the stated time, to which rule 2 adds that
you are *in fact* absent for that long.

Of course "to" could simply mean "in order to", but we still need
to analyse the wording to see what exactly the phrase "for at least
a whole tax year" attaches to.  There are three possibilities:
(1) leaving, (2) working, (3) the contract.  Case 3 boils down to
the same issue of intent already mentioned, given that contracts can
be broken or renegotiated.  Case 1 seems to be the one which aligns
with your interpretation that rule 2 would add nothing, however I
think case 2, or perhaps a combination of 2 and 3, is likeliest:

You leave in order "to work for .. a .. year".  There is still an
implication of intent because once you've actually left, the nature
of the work under the contract is subject to change (the new employer
could transfer you to a UK office), or the terms of the contract could
be renegotiated (e.g. its duration shortened), or you could resign
or get fired.

So we are still stuck with the interpretation that rule 1 might
imply only an intention of absence, and rule 2 adds that there must
be actual absence.  Rule 2 cannot therefore be taken to imply that
the absence must be total to the extent that under no circumstances
must you set foot on UK soil for the entire duration of the "absence",
and so it is natural to apply the definition of "absence" given
elsewhere in the rules also to its use within rule 2, i.e. that the
absence admits a limited amount of presence.

In any case, even if you do in fact *work* exclusively abroad, you're
not going to be working 7/52, and there is no earthly reason why the
tax rules should wish to prevent you spending your holidays in the UK.
"Absence" then has a very unusual meaning. I don't think you can
change what a word means simply because you don't like what the use of
the word requires.

Why didn't HMRC simply refer to start and end of a period of
employment abroad if they are happy for taxpayers to return for
holidays?

If I say I have been absent from London all week and somebody says
that they have seen me in London that week what would anybody think if
I said there's nothing wrong with being in London so I was still
absent!
 
P

PeterSaxton

I don't think so.  What does rule 1 mean?

For one thing, it depends on what it means by "to".  :)

Yes, really.  It could mean "with the intention of".  If so, it's easy
to answer your question:  Rule 1 requires that you *intend*, at the time
you leave, to work abroad for the stated time, to which rule 2 adds that
you are *in fact* absent for that long.

Of course "to" could simply mean "in order to", but we still need
to analyse the wording to see what exactly the phrase "for at least
a whole tax year" attaches to.  There are three possibilities:
(1) leaving, (2) working, (3) the contract.  Case 3 boils down to
the same issue of intent already mentioned, given that contracts can
be broken or renegotiated.  Case 1 seems to be the one which aligns
with your interpretation that rule 2 would add nothing, however I
think case 2, or perhaps a combination of 2 and 3, is likeliest:

You leave in order "to work for .. a .. year".  There is still an
implication of intent because once you've actually left, the nature
of the work under the contract is subject to change (the new employer
could transfer you to a UK office), or the terms of the contract could
be renegotiated (e.g. its duration shortened), or you could resign
or get fired.

So we are still stuck with the interpretation that rule 1 might
imply only an intention of absence, and rule 2 adds that there must
be actual absence.  Rule 2 cannot therefore be taken to imply that
the absence must be total to the extent that under no circumstances
must you set foot on UK soil for the entire duration of the "absence",
and so it is natural to apply the definition of "absence" given
elsewhere in the rules also to its use within rule 2, i.e. that the
absence admits a limited amount of presence.

In any case, even if you do in fact *work* exclusively abroad, you're
not going to be working 7/52, and there is no earthly reason why the
tax rules should wish to prevent you spending your holidays in the UK.
If they think it's ok to spend holidays and certain other activities
in the UK why don't they say so?

It's better than using a word that is incorrect.
 
A

Alan Ferris

If they think it's ok to spend holidays and certain other activities
in the UK why don't they say so?
They do!

--
Ferrit

()'.'.'()
( (T) )
( ) . ( )
(")_(")
"I always babble nonsense to people"
Patrick Barker
 
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A

Alan Ferris

"Absence" then has a very unusual meaning. I don't think you can
change what a word means simply because you don't like what the use of
the word requires.

Why didn't HMRC simply refer to start and end of a period of
employment abroad if they are happy for taxpayers to return for
holidays?

If I say I have been absent from London all week and somebody says
that they have seen me in London that week what would anybody think if
I said there's nothing wrong with being in London so I was still
absent!
I have been absent from work due to illness, yet I have still visited
my work to drop off a sick note. Your logic now says I was not absent
from work and therefore did not need the sick note as a half hour
attendance stops me being absent.


--
Ferrit

()'.'.'()
( (T) )
( ) . ( )
(")_(")
"I always babble nonsense to people"
Patrick Barker
 

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