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Fri, Sep 25, 2020
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UK Tax Residency Status

How the UK's 2008 Finance Act impacts Tax residency status for Ex-pat Brits in Greece and Cyprus:
Your Guide to UK Tax Changes


This page is a brief 'layman's' guide to the basic facts about income tax for Ex-pat Brits working in the EU in light of changes in the UK Finance Act 2008. In our case this relates to Brits in Crete, Mainland Greece, Greek Islands and Cyprus in particular.

Time spent working outside the UK, if you are already paying UK Income Tax is critically important as are the circumstances as to any liability to the British tax inspectors. The criteria and combinations are endless. Working - part time, full time, a brief time sent abroad for a temporary assignment for a UK company, a long term stay with work, a contracted assignment, retaining UK property and bank accounts, starting a new life lock stock and barrel, retirement etc, etc - all may be treated differently.


Important Rule of Thumb

When and where you pay your taxes is usually based on the principal of 'current residence' status. Getting it right from the outset can save you £££££'s.

This page only relates to Income Tax as applied by the UK Inland Revenue. It is only a guide as we make no claim to be accountants or financial advisors or have specialist knowledge in the subject.

First stop on your checklist should be the HM Revenue and Customs website .

Another Important Rule of Thumb

Inland revenue state that if you leave UK for at least three years you change your income tax status. You become non-resident and therefore non-liable for income earned outside the UK.
The caveat, and there are always some exceptions is you have to plan and limit the number of days you can spend on visits to the UK each year.

Simply, it is worked out based on a maximum stay of 183 days in any one year (remember a new tax year starts on April 6) that you can be on UK soil. Visits however are limited to a maximum of 91 days a tax year over consecutive years otherwise you revert to becoming resident again for income tax purposes in the UK. But wait a minute until April 2008 that was the common understanding. Since April 2008, some key points have changed. The downloadable document (Booklet IR20) is at end of this article.

In the case of being sent to work in Greece or Crete temporarily, for example a summer job, you remain liable for UK based taxation on all your income.  Should you take a job contract in Greece it is sometimes possible to have the income paid without the deduction of Greek tax. With tax being such a complex issue, many companies prefer to pay employees through their Greek subsidiaries, and subject you to local Greek tax.

To avoid any misunderstandings with either the UK or Greek tax authorities - be thorough in keeping every bit of proof any tax has been paid so as to avoid being taxed twice. Greece is of course an EU country. A double taxation treaty exists between Britain and Greece, so the chances of paying twice are minimal. In this age of bureaucracy proof needs to be readily available to be shown of income earned, and when and where tax was paid on it. Be it requested by the UK or Greek taxman.

More information for Brits in Greece/Cyprus living outside the UK and how it affects your tax implications can be located at HM Revenue and Customs website under the non-residents' section. This is the best place to source comprehensive details. More importantly the amendments to taxation under the Finance Act 2008 are to be found in the British government's leaflet IR20. There you will find most of the answers regarding income tax liability for residents and non-residents alike .