Increasingly, individuals are travelling abroad to carry out duties in relation to their employment in addition to carrying out some of their duties in the UK. It is important for those individuals to consider the tax implications surrounding this and the effect on their UK tax position.
If you are a non-domiciled individual who has been resident in the UK for less than 3 years and you have both UK and overseas work duties, there may be some planning opportunities available to you.
Individuals who qualify for Overseas Workday Relief may apply to HMRC to negotiate the percentage of earnings that relate to UK duties and overseas duties. Once this has been agreed, PAYE is only deducted from the proportion of their earnings that relate to UK duties. The proportion of earnings relating to overseas work duties would not be taxable in the UK through PAYE. Any remuneration relating to duties performed outside the UK will be treated as foreign earnings and as such will not be taxable in the UK unless remitted to the UK if you meet the following conditions;
- You must not be domiciled in the UK throughout the tax year;
- You are taxed on the remittance basis;
- You have worked either wholly or partly outside the UK during the year and that year is:
a) The first tax year immediately following three consecutive tax years in which you were not resident in the UK or;
b) One of the next 2 years following such a year.
There are transitional rules for individuals who qualified for overseas workday relief prior to the new statutory residence test which came into effect on 6th April 2013.
Please note that this only deals with the UK tax aspects not overseas. You would need to seek appropriate advice overseas.