Plus questions about UK pension taxes, the importance of reading employment contracts and closing a bank account from overseas, answered by The National's consumer advocate.
On Your Side: UAE workers' right to gratuity
I retired from the UK military in 1996 and receive a government military pension. I also have overseas tax status for UK tax purposes. But I have been told that despite this, I have to keep paying tax on my pension. Is this correct? Is there something I can do to stop this? - MB, Abu Dhabi
Military pensions are treated differently to private pension schemes, which can be paid to you without any tax being deducted while you are a resident overseas. However, for a UK defence ministry pension, you may only apply for a basic rate of tax to be deducted, instead of an automatic deduction of a higher rate of tax. The higher rate liability is often assumed, especially for higher ranks and those with longer service periods. If you do not intend to return to the UK and provided your pension fund is of sufficient size to make it cost-effective, this is a scenario in which you could consider transferring to a Qualifying Recognised Overseas Pension Scheme (QROPS). This allows for income to be paid to you without the deduction of tax, as well as other potential benefits, if you are a UK non-resident. The viability of this depends on the current status of your plan and various other factors. It is essential that you take proper advice from a qualified and experienced independent adviser if this is of interest because it is a technically complicated arrangement and you must be aware of the full details and consequences.
I work on a part-time basis in Abu Dhabi and have been employed by my company for just over three years. My work hours are very flexible and to date I have never requested, nor have I been granted, a return airfare, medical insurance or any holiday pay. I am paid for the time that I work, which is an average of 20 hours per week. Can you tell me if I am entitled to any gratuity if I leave my job? There are a number of people in the same situation as me at work and our manager is now asking us to sign a document to say that we will not make any claim on the company for airfares, holiday pay or gratuities. I don't want to sign unless their request is in compliance with the UAE Labour Law. TM, Abu Dhabi
TM is sponsored by her husband and has a labour card from her employer, as well as a basic contract. All workers are eligible for an end-of-service gratuity payment, unless they sign a document waiving their right to it. Part-time employees are not exempt and the gratuity is based on their average income. Where the employer is offering membership of a savings plan that is to the employee's benefit, you will often find that this is an alternative to the standard gratuity and certainly that is what the law expects. However, the employer cannot refuse to pay a gratuity just because someone works part-time. An employer cannot force an employee to sign such a waiver document and it is going against the spirit of the Labour Law. There is no legal requirement to provide airfares, but even part-time employees are entitled to holiday pay and statutory holidays with pay. All employees with an Abu Dhabi residency visa must be provided with medical insurance by their employer, unless the employee already has Health Authority - Abu Dhabi-compliant cover, such as being on a husband's policy.
I have been working as a security guard in Fujairah since July 25 last year. I have found a job as a financial controller for a company in Dubai that is paying Dh7,000 per month, which is much more than I earn now. Can you advise me on the shortest possible/safe way to quit my present job? SA, Fujairah
I have read the contract of employment and SA has been employed on a two-year, fixed-term contract. The contract that he signed clearly states that "the employee will bear all expenses in case he/she resigns before the completion of the employment period, and all extra expenses in case of visa transfer fees which exceed the minimum fees for the transfer, such as incomplete period or others". Although the UAE Labour Law states that this is not a requirement, a contract with these terms and signed by both sides is legally binding. If SA wishes to leave now, he will be subject to significant costs. He could also receive a ban. As I have said many times before, it is essential that people read employment contracts before signing them. If you do not fully understand the terms, you should ask for them to be explained so it is clear what you have committed to.
I lived in the UAE for many years and now live in Thailand. I have both a current account and credit cards with Emirates NBD (ENBD) that I want to close. I sent the bank a written instruction in September 2011, but the accounts are still active. I do not owe anything on the cards, but I am concerned they might accrue charges. I have tried to contact the bank, but it is difficult to get through to a person who will actually do anything apart from tell me to go to a branch, which I clearly cannot do. Can you help? GCJ, Thailand
I passed the query on to ENBD and the matter can now be resolved. ENBD staff have e-mailed and telephoned GCJ. However, for him to formally close the accounts, he must complete a form, which has been e-mailed to him by the bank, and return this together with a copy of his passport. Upon receipt, the accounts will be closed. It is disappointing that his original letter was not followed up, but the matter has been resolved to his satisfaction.