Tax guide for returning to the UK from Dubai

Burj Khalifa and glamorous shopping malls – what’s not to love about Dubai? 🤩 However, the high life can quickly become a nightmare if you’re unaware of the tax implications of returning to the UK from Dubai. So here’s your tax guide!

Do I need to tell HMRC I’ve returned to the UK from Dubai?

Yes! You will need to let HMRC know when you’ve returned to the UK, no matter where you were. 

Your tax liability in the UK depends greatly on whether you are considered a UK resident or non-resident, so you’re better off spilling the beans as soon as you know you will be returning. 

It’d probably be best to plan your return a year ahead of returning if this is possible. Some find it easier to return at the beginning of the tax year to make the tax process smoother.

Will I have to pay tax when I return to the UK?

If you’ve been away for more than a full tax year and less than five years – you will be considered a temporary non-UK resident. This means if you decide to return to the UK, your resident status will be reinstated. 

You will then have to pay tax on:

• Selected UK income 💷
• Selected foreign income 💴
• Assets purchased before you moved overseas (capital gains tax)

If you begin working in the UK, you’ll have to pay National Insurance.

If you’ve been abroad for over five years, the rules are slightly different as you won’t be considered a temporary non-resident. 

If you are only temporarily visiting the UK with no plans to stay, you will have to keep an eye on how many days of the year you are spending as this could trigger UK residency. 

Something as little as 16 days visiting your favourite aunt in the UK could see you with a tax bill from HMRC.

Find out how to know if you’re a UK resident and need to pay tax here.

What if I was away for less than a year?

If you relocate for less than a full tax year, you’ll remain a UK resident throughout and will be subject to the UK tax rules. Quite straightforward, that one.

Do I need to pay UK tax when in Dubai?

The UK and Dubai have a double-taxation agreement which means you won’t have to pay UK tax whilst working in Dubai. 

There is also currently no income tax in the UAE. Yep, you read that right – no income tax! 🤩

You can voluntarily make National Insurance Contributions if you plan on returning to the UK for retirement. This will contribute to your state pension entitlement. 

You’re probably thinking ‘who on earth would volunteer to pay National Insurance?’ It sounds awful at first, we know. But bear in mind, there is currently no state pension for expats in the UAE. So, it’s something to consider.

If you choose not to and return to the UK anyway, you can check your National Insurance record here. 

Can I apply for benefits when returning to the UK?

You will want to organise housing and income before getting that flight back. Even as a British national, it could take months to re-establish your rights to these services. 

You’ll also likely have to take a means test to use these services.

Tax – it can be so confusing! 😩

It doesn’t have to be. Our accredited accountants can file your tax return for a fixed price. And that’s not the only thing they can do! Find more about our personal tax services here.