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Where Taxpayers and Advisers Meet

tax implications of 2 jobs in 2 countries

Herbs16
Posts: 73
Joined: Wed Aug 06, 2008 3:53 pm

tax implications of 2 jobs in 2 countries

Postby Herbs16 » Tue Jan 12, 2016 11:57 am

Hi Forum
I have an associate who is Spanish born and bred who works for an Italian company.

He is coming to the UK in May /June to work permanently in the UK for the UK office, he will be over here for the next few years, and possibly bring his family?.

He will work in the UK but be paid by the Spanish company and the UK company, Im assuming he will be UK resident and therefore taxable on his worldwide income over here.

So do we need to do a UK tax return at the end of the year and declare his UK income and his Italian income and give him the tax credit (sterling equivalent) for the tax paid in Spain?

Many thanks

section 44
Posts: 4468
Joined: Thu Oct 30, 2008 12:47 pm

Re: tax implications of 2 jobs in 2 countries

Postby section 44 » Tue Jan 12, 2016 1:28 pm

Is this a joint employment, two employments or one employment?

Herbs16
Posts: 73
Joined: Wed Aug 06, 2008 3:53 pm

Re: tax implications of 2 jobs in 2 countries

Postby Herbs16 » Tue Jan 12, 2016 1:45 pm

2 employments, 2 contracts, one from the group company and one the subsidiary in the uk

bd6759
Posts: 3199
Joined: Sat Feb 01, 2014 3:26 pm

Re: tax implications of 2 jobs in 2 countries

Postby bd6759 » Wed Jan 13, 2016 6:11 pm

His income will be subject to PAYE by his UK employer.

No relief will be due for tax paid in Spain unless some of duties are carried out there.

GlobalTaxAdviser
Posts: 633
Joined: Fri Dec 05, 2014 1:18 am

Re: tax implications of 2 jobs in 2 countries

Postby GlobalTaxAdviser » Sat Jan 16, 2016 1:01 am

Hi

There is a whole host of issues when an employee comes from another country to the UK

Looks like all of his employment duties are going to be performed in the UK and irrespective of two contracts all of his income is going to be taxed in the UK as they relate to UK duties. Possibly he will not be taxed in his home country as he could be non residence though Spanish Tax Residence definition is 183 days as well as being determined by the centre of vital interest rule.

Possibly dependent on timing he could be tax residence in UK and Spain and then you would have to look at the double tax treaty to ascertain the primary taxing rights.

I don't see the point being paid from two locations if he is not actually working in Spain ? Perhaps more sensible for the UK to run the payroll and recharge the Spanish company for any work carried out ?

Sometimes dual contracts can be beneficial is he is actually working overseas and ring fence the oversea earnings tax through the remittance basis (since he is non domiciled). If his Spanish income has nothing to do with his UK employment then he can apply the remittance basis

This maybe a long shot but it "may" create a permanent establishment for the Spanish company if he is an employee of the Spanish company too

If he is being seconded to the UK then you can look at detachment relief and Overseas work day relief which may save the employee a considerable amount of tax. A1 will enable exemptions from UK National Insurance

There are other issues but maybe for another day.

Kind Regards

GTA


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