Global Mobility

United Kingdom | Conflict in the Middle East: Tax implications of returning to the UK

Summary

Given the ongoing conflict in the Middle East, some expatriates are temporarily returning to the United Kingdom. While personal safety is always the priority, a return can create unintended UK tax consequences if individuals spend an extended period in the UK.

As of March 11, the United Kingdom government recently estimated that 57,000 employees and expatriates have returned to the UK from the Middle East region. This alert highlights the potential tax considerations for those electing to return to the UK when the UK is not their usual place of employment.

At a high level, the longer a temporary stay in the UK lasts, the more likely it is that a UK tax issue could arise.

The detail

Will returning to the UK make you a UK tax resident?

UK tax residence is determined by the Statutory Residence Test (SRT). The length of time spent in the UK may affect an individual’s residence position under domestic law.

In certain situations, up to 60 days per tax year may be ignored for SRT purposes if an individual is in the UK due to exceptional circumstances. Where the Foreign, Commonwealth & Development Office (FCDO) warns against “all travel” to a jurisdiction, His Majesty’s Revenue and Customs accepts that the circumstances are exceptional (as of March 11, 2026 this covers Iran, Israel, and parts of Lebanon, and a small border region of Saudi Arabia). in an area with the strict “no travel” advice from the FCDO, it should not be assumed that this exception applies.

This will be more relevant if UK residence was broken recently, particularly in the 2024/25 or 2025/26 tax years.

Another aspect of the SRT to consider is the rule for individuals relying on the full-time work overseas test. Under this test, an individual must not have a “significant break” from overseas work, defined as a period of more than 30 days without an overseas workday. If the conflict disrupts work patterns, this condition may be breached. This does not automatically make an individual a UK resident, but it may significantly reduce the permitted UK day count required to maintain non-residence.

Treaty relief

Where an individual returns to the UK from a country with a Double Tax (DTA), income earned while in the UK may remain exempt from UK tax if the DTA conditions are met. The UK has DTAs with Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the UAE, Israel, and Jordan.

Typical conditions for exemption include:

• The individual is treaty-resident in the overseas country for the relevant tax year.
• They are present in the UK for no more than 183 days in any 12-month period beginning or ending in the tax year.
• Remuneration is paid by an overseas employer.
• The remuneration is not borne by a UK entity, and no UK permanent establishment is created.

Because treaty provisions differ by country, individuals should seek advice based on their specific circumstances.

Where someone has clearly broken UK residence, remains resident in one of the above jurisdictions for the year, and spends fewer than 183 days in the UK, treaty protection should normally apply. However, this may not always be possible.

When treaty relief may not apply

Treaty exemption may be lost if:

• Duties are performed for a UK employer upon return, making those duties taxable in the UK.
• The individual’s residence status changes under local domestic rules in the Middle East country (for example, failure to return during the year).
• The individual becomes a UK resident under the SRT, even if a dual resident, in which case the treaty tiebreaker rules would determine the country of treaty residence. If this is the UK, UK taxation applies.
• The overseas employing entity creates a taxable presence in the UK due to the individuals now working in the UK.

Social security: National Insurance

Typically, individuals returning to the UK for no more than 52 weeks may remain exempt from UK National Insurance contributions if they are locally employed in the Middle East and meet the exemption conditions. We recommend obtaining advice to confirm eligibility.

 

UK-sourced income

Regardless of residence position, UK-sourced income (for example, rental income) remains taxable in the UK.

 

Provision of benefits

• Employer-provided flights home should generally be exempt.
• Employer-provided accommodation may also be exempt under temporary workplace rules, but this requires a case-by-case review.

 

Employer reporting requirements

Where employees work in the UK, employers may need to consider Appendix 4 or Appendix 8 “Short-Term Business Visitor” reporting obligations.

 

Ongoing support and real-time updates

We continue to monitor developments closely and will share further updates as official guidance evolves.

For the latest updates and practical guidance, please refer to our:

• Previous regional alerts on Vialto.com
• Real-time crisis support dashboard (available on request)

If you require access to the dashboard, please email crisis_support@vialto.com and include:

• Name
• Organization
• Work email address
• Relevant Vialto contact (if applicable)

 

Contact us

For immediate assistance or case-specific support, please contact our Crisis Support team at crisis_support@vialto.com, or your usual Vialto contact.

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Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.

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