UK tax resident and Double Tax treaty

[Jackie769]

Hi

I am an Australian resident looking to do a secondment with my work for 5-6 months. During this time as I would have a Work tie and an Accommodation tie I would be a UK Tax resident

I have been told that even though I am a UK tax resident that I will be exempt from paying UK tax as long as I am in the UK for < 183 days. They have said because of the Australian - UK Double Tax Treaty I won't need to pay any tax.

Is this true?

Cheers

Jackie.

[AmanSood]

Hi Jackie

Broadly this is true but it really depends on how the Company/your employer sets up the secondment and ensures for example it has the agreement from HMRC as well as does not recharge the costs of the secondment to the UK entity. The UK Company/employer will have some reporting requirements to HMRC and provided they are compliant with these you should not be taxable on your UK employment income assuming you spend less than 183 days in the UK.

Hope this helps.

Aman

[Jackie769]

Hi Aman,

Thanks that is very helpful. What if the UK entity are paying for all my expenses does this mean I would not be exempt then and have to pay tax.

Cheers

Jackie

[AmanSood]

That's right. Any expenses paid for by the UK entity are normally not exempt and normally any tax due would be withheld at source by your employer. However, where UK taxes are due on a secondment, most employers tend to equalise their employees so that you are no worse off from a tax perspective as a result of working in the UK.