In recent years, the allure of the United Arab Emirates (UAE) has drawn thousands of UK residents seeking sunshine, zero income tax, and a fresh start abroad. But a growing number of British expatriates are learning the hard way that leaving the UK does not automatically mean leaving the UK taxman behind.

HM Revenue & Customs (HMRC) is stepping up efforts to identify and pursue individuals who have relocated overseas, particularly to tax-free jurisdictions like Dubai, while still retaining taxable ties to Britain. Armed with enhanced data-sharing powers, international cooperation agreements, and advanced analytics, HMRC is determined to close the gap on those who believe they can quietly slip off the radar.

This article explains how HMRC is tightening the net, what they’re looking for, and why anyone planning to emigrate needs to take proactive steps to ensure full compliance.

The Rise of the ‘Stealth Expat’

The term “stealth expat” has gained traction in HMRC circles to describe individuals who physically relocate abroad but fail to properly sever their UK tax residence.

Common examples include:

  • Professionals who move to Dubai for work but continue to own a UK home.
  • Individuals who split their time between the UK and UAE but exceed their permitted UK day count.
  • Business owners who continue to manage UK operations remotely.
  • Landlords with undeclared rental income from UK property.

In many cases, these individuals mistakenly believe that a UAE residence visa or tax residency certificate automatically removes their UK tax exposure. Unfortunately, HMRC takes a very different view.

The Statutory Residence Test: The Decisive Factor

At the heart of HMRC’s assessment lies the Statutory Residence Test (SRT) – a detailed framework introduced in 2013 that determines an individual’s tax residence status based on objective criteria.

The SRT considers:

  • Days spent in the UK during each tax year;
  • Ties to the UK such as a home, family, or substantive work; and
  • Full-time work abroad or “automatic overseas tests” that can establish non-residence.

Many would-be expatriates fall foul of the SRT by misunderstanding how it applies. For instance, spending as few as 46 days in the UK in a given year could trigger UK residency if certain ties remain. Even short business trips, family visits, or property management activities can tip the balance.

HMRC’s current crackdown involves cross-checking flight data, border records, and financial transactions to verify claims of non-residence. If the evidence suggests a taxpayer is exceeding the limits, a reassessment and potential back-tax demand can follow.

Global Data Sharing: No Hiding Place

The days of hiding assets or income overseas are over. HMRC now participates in Common Reporting Standard (CRS)—a global information-exchange initiative that allows tax authorities to automatically share financial account data across borders.

Although the UAE was initially slow to adopt CRS, it is now fully signed up, and UK authorities receive regular updates on accounts, investments, and property owned by UK-connected individuals in Dubai and Abu Dhabi.

Additionally, HMRC uses information from:

  • Land registries and property developers in the UAE to identify Britons owning overseas real estate.
  • Banks and financial institutions, which are required to report foreign account holders’ details.
  • Social media activity, professional networking sites, and even press coverage to identify individuals who appear to be living lavishly abroad while declaring minimal income at home.

In short, digital footprints and financial trails now form a comprehensive picture that HMRC can use to challenge residency and compliance claims.

Common Misconceptions That Lead to Trouble

Even well-intentioned expatriates can fall into compliance traps due to misunderstandings, including:

  • “I don’t live in the UK anymore, so I don’t need to tell HMRC.”
    False. You must formally notify HMRC when leaving the UK, usually by completing a P85 form or the SA109 non-residence pages in your Self Assessment return.
  • “I have no income in the UK.”
    If you rent out a property, receive a UK pension, earn dividends from a UK company, or maintain a UK bank account generating interest, you may still have UK-source income that is taxable.
  • “I spend less than half the year in the UK, so I’m safe.”
    Residence isn’t determined by a simple 183-day rule; the SRT’s tie system is far more complex.
  • “I’ll just work remotely for my UK employer.”
    This arrangement can create both UK and UAE tax complications, especially if your work is deemed to have a UK base or if you visit the UK for meetings.

What You Should Do Before You Move Abroad

If you are considering relocating to the UAE, or have already made the move, take the following steps to protect yourself:

  1. Seek professional advice before departure to establish your UK tax position and residence status.
  2. Submit the correct forms (P85 or Self Assessment with SA109) to formally notify HMRC of your move.
  3. Keep accurate records of travel dates, accommodation, employment, and ties to the UK.
  4. Review your UK-source income and ensure all relevant returns continue to be filed.
  5. Plan your affairs with the forthcoming 2025 reforms in mind.

Final Word: Don’t Assume, Confirm

Emigrating to a low-tax jurisdiction like the UAE can be financially beneficial, but only if done correctly. The idea that you can “disappear” from HMRC’s radar is outdated and dangerous. With global data sharing, analytics, and targeted enforcement, the UK tax authority is more capable than ever of tracking cross-border wealth and activity.

Before you pack your bags, make sure your tax affairs are watertight. The penalties for getting it wrong far outweigh the cost of proper planning.

Need Expert Help with Your UK Tax Position?

At Williamson & Croft, we specialise in helping clients manage the tax implications of moving abroad. Whether you’re planning a relocation to the UAE or already living overseas, our experienced advisors can ensure you remain fully compliant – while making the most of legitimate reliefs and opportunities.

Contact us today for a confidential consultation and ensure HMRC doesn’t come calling after you’ve left the country.