Dubai expats fleeing warfare in Middle East concern big tax payments in the event that they return to Britain as they urge HMRC for readability on exemptions to 183-day rule
Thousands of Brits fleeing the Middle East war including those living in Dubai are urging the UK Government to confirm whether they will face large tax bills.
Some of the 160,000 British nationals registered in the region could face a higher tax bill if they have returned to the UK since the US-Israeli attacks on Iran began.
Experts warn the unexpected move could take them over 183 days spent in the UK during the current financial year, which ends in just three weeks’ time on April 5.
With some Brits having been close to the limit before the outbreak of war, their return could mean their income generated abroad becomes taxable in the UK.
Thousands of Brits have moved to the United Arab Emirates in recent years to make the most of its largely tax-free regime and enjoy a more luxurious lifestyle.
But the UAE has faced attacks from Iranian drones since the war began on February 28, including in Dubai on the Burj Al Arab hotel and International Financial Centre.
Just this morning, flights had to be cancelled at Dubai International Airport – one of the world’s busiest hubs – after an Iranian drone damaged a fuel depot on the site.
Black smoke rises from an ongoing fire at Dubai International Airport after a drone strike today
An Emirates Airbus A380 aircraft prepares for landing as smoke is seen at Dubai Airport today
Sandra Jeevan, a partner at accountancy firm UHY Hacker Young, told The Times: ‘We are hearing from many families who never intended to return to the UK this year but now have had no choice.
‘They could face exposure to UK tax simply because their emergency return alters their UK residence position. When you are trying to move your family to safety, you are not focused on day‑count rules or technical residence tests.
‘While [HM Revenue & Customs] has updated its guidance to acknowledge that the outbreak of war can qualify as an “exceptional circumstance” for residency purposes, the rules remain highly restrictive and are strictly limited in scope.’
Those who breach the 183-day period because of an ‘exceptional circumstance’ or ‘circumstances outside their control’ can have 60 days disregarded from their total.
But Government rules also state that someone choosing to stay in Britain to be with family following the end of an initial crisis is not normally deemed ‘exceptional’.
Empty beds in front of buildings along a beach at Jumeirah Beach Residence in Dubai last week
A man checks his mobile phone while sitting on his camel on the beach in Dubai last week
Some are even looking at staying in countries such as Ireland and France instead of returning to Britain to ensure they avoid a big UK tax bill, reported The Guardian.
Nimesh Shah from advisory firm Blick Rothenberg said: ‘I’ve had a disproportionate number of calls from people wanting to leave the UAE in recent weeks.
‘I’ve told them not to rely on any exceptional circumstances provisions from HMRC. I can’t imagine HMRC are very sympathetic here.
‘There’s UK taxpayers who have decided to leave to go to the likes of UAE. In HMRC’s mind they’ve chosen to go there to not pay tax in the UK. They’re not going to give you a green light to spend more time here and not pay tax.’
A HMRC official told the Times: ‘The existing rules provide the right protection while following the basic principle that individuals living in the UK should pay tax in the UK.
‘Exceptional circumstances, such as being affected by a war, are taken into account.’
The Daily Mail has contacted HMRC for comment.
