Self Employment in the UK

[Deleted member 360288]

Hello everyone. I appreciate all help regarding our situation.

We are trying to work out whether my husband is in self-employment in the UK or overseas. Because we are trying to apply for a spouse visa and the UK government has special financial requirements that we must meet.

He is a sole trader doing remote freelance work. His business is registered in the UK and he is British. He continued his business whilst in the UK for 5 years then moved abroad to live with me. But ever since he founded his business he has been paying tax to the UK government, so he has no business ties abroad, other than just working abroad remotely. His financial tax year is from april 6th 2023- april 5th 2024.

He lived abroad for 3 years and now back in the UK permanently. But I cannot work out whether he counts as UK resident or not for tax purposes.

As he does not earn foreign income, or have registration abroad, does that make him self employed in the UK?

Thanks in advance.

 

[WaveJumper]

Personally I would have thought if he has a UK passport, is classed as a UK citizen, is registered with HMRC as self employed and pays all his tax’s here why would you think he’s not, what “special” requirements are you referring too

 

[Deleted member 360288]

According to the HMRC Residence, Domicile and Remittance Basis Manual:

If an individual has previously been resident in the UK and they are returning after a period abroad, you will need to consider whether or not the absence from the UK was a period of non-residence. If an individual was not resident they may have been ‘temporarily not resident’ and this might affect their liability to UK tax when they become resident in the UK again.

RDRM10200 - Residence: Coming to the United Kingdom manual explains it more clearly. ​

Thank you.

 

[Newchodge]

As a sole trader there is no way to register a business in the UK. If he was working while living in a foreign country he should have been following the local tax laws unless he was tax resident in the UK at that time, which seems unlikely. When did he return to the UK?

 

[Deleted member 360288]

As a sole trader there is no way to register a business in the UK. If he was working while living in a foreign country he should have been following the local tax laws unless he was tax resident in the UK at that time, which seems unlikely. When did he return to the UK?

He returned to the UK at the end of December 2023 permanently. It has been over 3 months. But as I said, his business is remote and he does freelance work. And his customers are from all around the world. His business has nothing to do with the country he once lived in.

 

[Newchodge]

He returned to the UK at the end of December 2023 permanently. It has been over 3 months. But as I said, his business is remote and he does freelance work. And his customers are from all around the world. His business has nothing to do with the country he once lived in.

I really think you need to speak to an immigration lawyer.

 

[Deleted member 360288]

I really think you need to speak to an immigration lawyer.

Thank you for your replies. I am just curious why you think so. Do you have any relevant information?

 

[Newchodge]

Thank you for your replies. I am just curious why you think so. Do you have any relevant information?

I run a payroll service. I am very aware of cases where employees choose to go and live abroad and ask to work remotely. They usually cannot just be paid through UK payroll but need to follow the rules in the country in which they are living. Although not on payroll there is little difference with your husband's situation.

I do know, for certain, that there is no 'registration' for a sole trader in the UK. There was actually no link whatsoever between your husband's business and the UK during the 3 years he lived abroad, other than he chose to send money to HMRC. Did he tell them he was living abroad?

It is a complex issue, which is why I suggest you need professional advice.

 

[Deleted member 360288]

I run a payroll service. I am very aware of cases where employees choose to go and live abroad and ask to work remotely. They usually cannot just be paid through UK payroll but need to follow the rules in the country in which they are living. Although not on payroll there is little difference with your husband's situation.

I do know, for certain, that there is no 'registration' for a sole trader in the UK. There was actually no link whatsoever between your husband's business and the UK during the 3 years he lived abroad, other than he chose to send money to HMRC. Did he tell them he was living abroad?

It is a complex issue, which is why I suggest you need professional advice.

Thank you for explaining. As far as I know he did not tell them he was living abroad. Would this cause any issues? If so, what kind of issues?

Also do you know anything about the HMRC Residence, Domicile and Remittance Basis Manual?

 

[Newchodge]

Thank you for explaining. As far as I know he did not tell them he was living abroad. Would this cause any issues? If so, what kind of issues?

I am afraid I don't know enough about it. You really need professional advice.

 

[Deleted member 360288]

I am afraid I don't know enough about it. You really need professional advice.

Thank you so much. One last question. Do you know anything about the HMRC Residence, Domicile and Remittance Basis Manual?

It is to guide you whether someone has a UK residence in short. There are specific test that allows you to make sure someone is a uk tax resident, and they need to pay tax to the uk. And I think my husband passes the tests, which mean he is still a uk resident. would that make any difference?

Sorry for bothering you with many questions, but I really appreciated your help!

 

[Newchodge]

Thank you so much. One last question. Do you know anything about the HMRC Residence, Domicile and Remittance Basis Manual?

It is to guide you whether someone has a UK residence in short. There are specific test that allows you to make sure someone is a uk tax resident, and they need to pay tax to the uk. And I think my husband passes the tests, which mean he is still a uk resident. would that make any difference?

Sorry for bothering you with many questions, but I really appreciated your help!

I am not familiar with it, however I am not sure why your husband's tax residence has any bearing on immigration matters.

 

[Deleted member 360288]

I am not familiar with it, however I am not sure why your husband's tax residence has any bearing on immigration matters.

We can still apply for a visa with his self employment overseas, but it just has different requirements. That's why I am trying to work out which requirements we must meet.

I appreciate your help and will consider what you suggested. Thanks once more.

 

[Argentum Tax]

Thank you so much. One last question. Do you know anything about the HMRC Residence, Domicile and Remittance Basis Manual?

Do you understand that this manual is for HMRC staff?

You do really need to take proper advice from a qualified and experienced tax adviser/accountant rather than relying on questions asked in this forum.

 

[Newchodge]

Do you understand that this manual is for HMRC staff?

You do really need to take proper advice from a qualified and experienced tax adviser/accountant rather than relying on questions asked in this forum.

I absolutely agree about the professional advice, but it should be from an immigration lawyer.

 

[Deleted member 360288]

Do you understand that this manual is for HMRC staff?

You do really need to take proper advice from a qualified and experienced tax adviser/accountant rather than relying on questions asked in this forum.

No, sorry, I did not know that. I am abroad at the moment and not able to take advice from a UK based lawyer or an accountant. I will contact my spouse to do so. Thank you.

 

[Argentum Tax]

I absolutely agree about the professional advice, but it should be from an immigration lawyer.

Yes Cindy, I agree that an immigration lawyer would be needed for the spouse's visa advice.

But I suspect a tax adviser/accountant will be needed to advise re the unravelling of the Income Tax problem arising from the moving abroad of the husband but still paying tax as if he was in the UK.

This apparent 'pretence' of working in the UK (assuming he completed his Tax Returns showing a UK address) might not be effective for satisfying the immigration rules for the spouse's visa, which was perhaps the intention when paying UK tax.

 

[Deleted member 360288]

Yes Cindy, I agree that an immigration lawyer would be needed for the spouse's visa advice.

But I suspect a tax adviser/accountant will be needed to advise re the unravelling of the Income Tax problem arising from the moving abroad of the husband but still paying tax as if he was in the UK.

This apparent 'pretence' of working in the UK might not be effective for satisfying the immigration rules for the spouse's visa, which was perhaps the intention when paying UK tax.

Thank you, I see what you mean. The reason why he was paying UK tax was because

1) He did not intentionally move abroad in the first place. It was due to UK's covid-19 red list. He could not go back to the UK and come back to visit the red listed country therefore until the red lists were removed he stayed. And in the meantime we decided to get married.

2) Immediately the year after we got married we were going to apply for a spouse visa but due to our financial situation at that time we could not satisfy the requirements, therefore he stayed for another year abroad to meet the requirements. But he kept going back to the UK in the meantime. So he always had ties to the UK.

So none of it was really planned. But I absolutely understand your points and will be consulting a solicitor. Thank you.

 

[WaveJumper]

Yes unfortunately a can of worms has probably opened up here one the tax and two the immigration issue and as mentioned above I would get your husband (and yourself of course) to seek proper legal and accounting advice whilst he’s here in the UK . Best of luck and do let us know how you get on

 

[Newchodge]

Yes Cindy, I agree that an immigration lawyer would be needed for the spouse's visa advice.

But I suspect a tax adviser/accountant will be needed to advise re the unravelling of the Income Tax problem arising from the moving abroad of the husband but still paying tax as if he was in the UK.

This apparent 'pretence' of working in the UK (assuming he completed his Tax Returns showing a UK address) might not be effective for satisfying the immigration rules for the spouse's visa, which was perhaps the intention when paying UK tax.

My concern would be whether the Home Office would see such a 'pretence' as fraudulent, in immigration terms and may be able to advise whether it is better left unresolved for the time being.

 

[Argentum Tax]

Thank you, I see what you mean. The reason why he was paying UK tax was because

1) He did not intentionally move abroad in the first place. It was due to UK's covid-19 red list. He could not go back to the UK and come back to visit the red listed country therefore until the red lists were removed he stayed. And in the meantime we decided to get married.

2) Immediately the year after we got married we were going to apply for a spouse visa but due to our financial situation at that time we could not satisfy the requirements, therefore he stayed for another year abroad to meet the requirements. But he kept going back to the UK in the meantime. So he always had ties to the UK.

So none of it was really planned. But I absolutely understand your points and will be consulting a solicitor. Thank you.

@purpledais

I guess what I am trying to say is that being UK 'tax resident' (for UK Income Tax purposes) is not necessarily the same as being resident for the purposes of UK immigration visa.

I have no in depth experience in this respect but I do understand that while a person may qualify as being 'UK tax resident', he or she might not necessarily be UK 'resident' for immigration or other purposes.

 

[Deleted member 360288]

@purpledais

I guess what I am trying to say is that being UK 'tax resident' (for UK Income Tax purposes) is not necessarily the same as being resident for the purposes of UK immigration visa.

I have no in depth experience in this respect but I do understand that while a person may count as being 'UK tax resident', he or she might not necessarily be UK 'resident' for immigration or other purposes.

I understand that now.

In order to apply for a spouse visa the sponsor does not necessarily need to be living the uk. He can come from abroad to live back in the uk and there are special requirements for that i.e. you need a job offer starting in three months of your arrival etc.

That's why I asked this question on this forum -- to understand if he is self-employed overseas. And he most probably is as far as I understand, so then we need to meet those requirements.

I thank you all allowing time to answer my questions. I appreciate it.

 

[Argentum Tax]

Thank you, I see what you mean. The reason why he was paying UK tax was because

1) He did not intentionally move abroad in the first place.

Glad you understand @purpledais

Unfortunately the 'intention' when moving abroad would have no bearing on the Income Tax liability. The liability is based upon fact, and the fact is he lived abroad for 3 years, as you say.

Not only do you need a solicitor, you also need a qualified and experienced tax adviser/accountant.

Hope that you get it sorted out to your satisfaction.

 

[Deleted member 360288]

Glad you understand @purpledais

Unfortunately the 'intention' when moving abroad would have no bearing on the Income Tax liability. The liability is based upon fact, and the fact is he lived abroad for 3 years, as you say.

Not only do you need a solicitor, you also need a qualified and experienced tax adviser/accountant.

Hope that you get it sorted out.

Thanks for good wishes.