Personal Tax Working Abroad For UK Company

[BritInSaudi]

Hello!

I was really hoping for some advice on on my current situation. I currently live in Saudi Arabia. ( just three months) My company in the UK did not want to lose me and as I work from home in the UK, they have asked me to continue working from home in Saudi Arabia. I am living here because of my partners job. I am not registered as a resident of Saudia Arabia and I am still legally a resident of the UK. I am being paid into a UK bank account and paying all relevant tax's as I normally would. My company has feedback that the arrangement is working well from an operational perspective but they have concerns about whether they are "at risk' as an employer having someone physically working out of Saudi. None of my work is related to Saudi. It is all UK centric. Can anyone give me some advice as to whether my company is putting themselves at any tax liability risk? Many thanks!

[darthblingbling]

Where an employer has employees working overseas, it opens up the risk that the overseas country will deem the employer to have a permanent establishment in that country. This can lead to:
- the PE could be subject to tax on its deemed profits (i.e. profits attributed to the employees activity)
- transfer pricing risks
- statutory filings and registrations may be required for the PE
- payroll taxes and reporting may be required
- social security obligations may arise
- sales tax presence risk
- other legal issues outside of tax

Overall it's a risk most company's who are aware of it prefer to do without and will restrict employees working overseas for too long.

[etf]

Additionally, there may be potential overseas HR issues that a UK employer might need to consider.