A UK IT contractor who moves to Dubai stops being UK resident only if they meet the UK statutory residence test rules for non residence, because the UAE does not levy income tax on individuals and so has no tax on salary to offset. If both countries treat them as resident, the 2016 UK and UAE convention settles it, and a UK company run from Dubai can come within UAE corporate tax.

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When do you stop being UK resident?

Use the statutory residence test for each UK tax year. HMRC says you are usually non resident if you spend fewer than 16 days in the UK, or 46 days if you were not UK resident in the 3 previous tax years. You are also usually non resident if you work full time abroad, averaging at least 35 hours a week, and spend fewer than 91 days in the UK with fewer than 31 days on which you work more than 3 hours in the UK.

Fail those and you can still be UK resident under the 183 day, home or sufficient ties tests, in which case you pay UK tax on worldwide income. Tell HMRC you are leaving on form P85, or on the SA109 residence pages if you file Self Assessment.

When are you resident in the UAE?

Cabinet Decision No. 85 of 2022, in force from 1 March 2023, makes a natural person UAE tax resident if any one of these applies:

  • their usual or primary place of residence and the centre of their financial and personal interests are in the UAE
  • they are physically present in the UAE for 183 days or more in a relevant 12 consecutive month period
  • they are present for 90 days or more in that period, are a UAE national, hold a valid residence permit or hold GCC nationality, and also have a permanent place of residence in the UAE or carry on employment or a business there

The Ministry of Finance says every day or part of a day of physical presence counts.

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What tax do you pay in Dubai?

The UAE government portal says the UAE does not levy income tax on individuals. Corporate tax applies to a natural person only if they carry on a business in the UAE with turnover above AED 1 million in a calendar year, and the Ministry of Finance says personal income from employment, investments and real estate falls outside it. Corporate tax is charged at 9% on taxable income above AED 375,000, with 0% below, from the first financial year starting on or after 1 June 2023. The UAE also charges 5% VAT on goods and services.

What does the UK and UAE treaty say?

The 2016 convention is on gov.uk under “United Arab Emirates: tax treaties”. It was signed in Dubai on 12 April 2016, entered into force on 25 December 2016 and applies to taxable years starting on or after 1 January 2017. Under Article 4(1), an individual is a UAE resident if they are domiciled in the UAE under its laws, or have their habitual abode or centre of interests there. If both countries treat you as resident, Article 4(3) looks in turn at:

  1. where you have a permanent home available to you
  2. if you have a home in both, where your personal and economic relations are closer
  3. where you have a habitual abode
  4. your nationality, and then mutual agreement between the tax authorities

Article 14 lets the country where employment is exercised tax salary for that work, and Article 15 lets the UK tax directors’ fees paid by a UK resident company. With no UAE income tax, a treaty claim mainly helps you show HMRC where you are resident.

What happens to your UK company and IR35?

HMRC treats a company incorporated in the UK as UK resident, so your company keeps paying UK corporation tax. The Federal Tax Authority’s guide says a company incorporated abroad is a UAE resident person if it is effectively managed and controlled in the UAE, and it describes a permanent establishment as a fixed or permanent place in the UAE through which a business is wholly or partly carried on. If both countries claim the company, Article 4(4) of the treaty leaves residence to mutual agreement between the tax authorities. Read company residence, permanent establishment risk and keeping a UK limited company after moving abroad.

For IR35, HMRC says a non UK resident worker working outside the UK is unlikely to fall within the UK tax or National Insurance charge, so the off payroll rules will not apply. Where the client has no UK residence or UK permanent establishment, Chapter 10 does not apply and your company must consider Chapter 8. See IR35 when the client is overseas and non UK resident directors.

Do you still pay UK National Insurance?

The UAE is not on HMRC’s list of countries with a UK social security agreement. Under NI38, if you are employed abroad by an employer with a place of business in the UK, are ordinarily resident in the UK and were UK resident immediately before the job, Class 1 contributions are due for the first 52 weeks. From 2026 to 2027 onwards only voluntary Class 3 contributions can be paid for periods abroad, and you need 10 years of continuous UK residence or 10 qualifying years of contributions, or 52 weeks of Class 1 at the start of your overseas employment. See National Insurance when working abroad.

Can dividends paid while you are away be taxed when you return?

Yes. HMRC’s temporary non residence rules apply if you had sole UK residence in 4 or more of the 7 tax years before you left and your period of non residence lasts 5 years or less. Distributions from a close company in which you were a material participator are then charged to UK tax as if received in the period of your return. For people who become UK resident again on or after 6 April 2026, HMRC says the charge applies to the full amount, including any part relating to trade profits from the non residence period.

Point Position
UAE personal income tax Not levied on individuals
UAE residence 183 days in 12 months, 90 days with conditions, or main home and interests
Treaty 2016 convention, in force 25 December 2016
Company tie breaker Mutual agreement, Article 4(4)
Social security No UK agreement; Class 1 for first 52 weeks if conditions met
Return within 5 years Close company dividends taxed in year of return

How might this work in practice?

Illustration only. Chris is the only director and shareholder of a UK IT consultancy. He moves to Dubai on 1 April 2026 with a residence permit and a rented apartment, and works full time for clients in Europe. In 2026 to 2027 he spends 30 days in the UK, working on 8, so he meets the full time work abroad test and is not UK resident. His company is now run from Dubai, so he takes UAE advice on whether it is effectively managed there. He plans to return to the UK in 2029, within 5 years, so dividends he takes while away would be taxed in his year of return.

What should you check before you go?

  • Count UK days and UK work days for each tax year
  • File P85 or the SA109 residence pages
  • Decide where the company will be managed and review UAE corporate tax exposure
  • Check Class 1 for the first 52 weeks and whether voluntary Class 3 is worth paying
  • Plan dividends around the temporary non residence rules
  • Keep evidence of your UAE home and travel, as HMRC can open a check into a return after a move abroad, and an accountant’s fees for dealing with it can be insured through tax investigation insurance

UAE rules have changed a lot since 2023. Figures here come from the Ministry of Finance, the Federal Tax Authority and the UAE government portal as published at the dates stated, so confirm the position with an adviser in the UAE before relying on it.

Frequently asked questions

Is my salary from my UK company taxed in Dubai?

The UAE does not levy income tax on individuals, and employment income falls outside UAE corporate tax. The UK may still tax it if you remain UK resident or do UK work.

Does the 183 day rule alone make me non UK resident?

No. UK residence depends on the statutory residence test, not on UAE days. Spending fewer than 183 days in the UK does not by itself make you non resident.

Is there a social security agreement between the UK and the UAE?

No. The UAE is not on the list of countries in HMRC’s NI38 guidance.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 6 November 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.