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Where Taxpayers and Advisers Meet

UK resident and working for a foreign company in a third-country

gdrogo
Posts: 1
Joined: Tue Sep 08, 2020 2:13 pm

UK resident and working for a foreign company in a third-country

Postby gdrogo » Tue Sep 08, 2020 2:25 pm

Hello everyone,

I'm a UK resident (and non-domiciled) and I'll be working for a US company starting next year. The work will take place outside of the UK and the US, mostly in one EU country, but possibly across several EU and non-EU countries. The US company does not have UK presence, nor it has a presence in those countries I'll be working on. I'm planning to claim the remittance basis if my income exceeds the relevant threshold. However, I understand that, in any event, I would not be exempt from national insurance contributions. My question is, am I liable in the UK, in the US or in those other countries where I will do the actual work?

Any hint would be kindly appreciated.

maths
Posts: 7966
Joined: Wed Aug 06, 2008 3:25 pm

Re: UK resident and working for a foreign company in a third-country

Postby maths » Sun Sep 13, 2020 1:36 pm

Not straight forward.

As a UK resident but non-domiciled you are liable to UK income tax on overseas (ie non-UK) earnings only if remitted to the UK (assuming remittance basis claimed). Otherwise UK income tax is levied.

Under many of the UK's DTAs you would not be exposed to income tax on the overseas territory in which you are working assuming you are in the overseas territory for less than 183 days in any 12 month period. However, if you claim remittance basis treatment in the UK then typically under the DTA this exemption from income tax in there overseas territory is effectively withdrawn.

Thus, if you elect in UK for remittance basis treatment and remit nothing then you are exposed to income tax in overseas territory.
If you don't claim remittance basis treatment then you are liable to UK income tax but avoid overseas territory tax assuming you are there for less than 183 days.

I'm assuming you do not fall to be resident in the overseas territory in which you are working (which may arise). Preferable to avoid at all costs.


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