If you are thinking about working abroad through an umbrella solution or a Limited company, we can help!
In partnership with Procorre, we will ensure that you remain fully tax compliant wherever you are working, without paying more in tax than you need to.
When you work abroad you may or may not remain UK tax resident. If you stay out of the UK to work for a full tax year (6th April to the following 5th April) and are not in the UK for more than 182 days in that year, then you may become non-UK tax resident. This means you are not subject to UK income tax on your income that has arisen while working abroad.
If you do not meet these criteria then you remain a UK tax resident and subject to the UK’s worldwide taxing rules so that all foreign income will be subject to full UK income tax and social security.
In most circumstances, we would not advise working through your company overseas without taking advice from our overseas tax specialists, Procorre, as there may be legislation in place preventing you from doing so and strict penalties for non- compliance in certain countries. We suggest that you speak to one of our tax advisers for further information. Income earned abroad is generally taxed in the country you are working unless:
In general, if you are seconded by your employer to work abroad for less than six months and there is a DTA in force, you will pay your income tax back home. If you work for periods longer than this, tax must be paid in the work country from the start date of your working there.
In order for the DTA to apply the company you are working for must not have a permanent establishment (PE) created by having fixed place of business, nor should its centre of management have shifted to the work country. Furthermore, the costs of engaging you must not be paid by a business that does have a PE in the work country.
Social costs (which are the equivalent of NICs in the UK) are payable in the work country. The only exception is where a so-called Certificate of Coverage is obtained from your home country or that of your employer.
Brookson alongside our business partner Procorre are able to discuss your individual circumstances to advise what working options are best suited to you, whilst ensuring that tax, social security, employment law and labour-leasing laws in the work country are respected as well as the laws that apply in the UK.
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