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Where Taxpayers and Advisers Meet

Employee Based overseas over two years

Dave-A
Posts: 127
Joined: Wed Aug 06, 2008 4:10 pm

Employee Based overseas over two years

Postby Dave-A » Sat Oct 20, 2018 11:06 am

An employee has been seconded overseas to support installation contracts that run for six months at a time.

In recent times he has stayed there as another contract has been won so the jobs have rolled up so that he has stayed there pretty much permanently for over two years, although this was not expected to be the case at the outset.

He regularly comes back to the UK for breaks and for periods when the work isn't required. Sometimes these breaks are for two or three weeks at a time.

As the bulk of his time has now been spent overseas for over two years, should his accommodation and expenses all now be taxable?

Thanks for reading.

AdamS93
Posts: 228
Joined: Tue Sep 26, 2017 6:28 pm

Re: Employee Based overseas over two years

Postby AdamS93 » Sat Oct 20, 2018 11:47 am

Firstly, I would establish their residency position - the answer will be very different if they are UK resident or non-UK resident.

If non-resident (likely by the sounds of it under automatic non-resident test 3) then only his UK income will be taxable in the UK in the first place. You would apportion the employment income between UK and overseas on a just an reasonable basis, usually workdays. By the sounds of it he returns to the UK for holidays and therefore, duties of his employment are wholly overseas and therefore, not taxable in the UK is he is non-resident.

If he is UK resident, then all of his employment income will be taxable in the UK, subject to double-tax relief/double tax treaty provisions. The normal rules will apply for the travel rules - allowable if a temporary workplace (less than 24 months). If these overseas secondments are to different places then in my opinion the 24 month clock would start again at the new location.

There are further provisions for overseas employment in ITEPA s341/375/370/371 so it may be worth a read of these.

darthblingbling
Posts: 253
Joined: Wed Aug 02, 2017 9:09 pm

Re: Employee Based overseas over two years

Postby darthblingbling » Sun Jan 27, 2019 9:55 pm

Even if he's non resident, as he's seconded he's likely to still be subject to NI in the UK; at least for 52 weeks or longer depending on whether there is a social security agreement with the other country in question.

Andrew55555
Posts: 1
Joined: Thu Jun 20, 2019 3:32 am

Re: Employee Based overseas over two years

Postby Andrew55555 » Thu Jun 20, 2019 3:36 am

I too am in a similar situation.
I have worked abroad feom June 2016 until may 2018, but have to file a self assessment for the 2016/17 as it was the last year I had my LTD company.
Do I qualify for a partial tax year as I was on a NT tax code from when I left in June?

darthblingbling
Posts: 253
Joined: Wed Aug 02, 2017 9:09 pm

Re: Employee Based overseas over two years

Postby darthblingbling » Thu Jun 20, 2019 8:28 am

Probably is the best answer I can give. Depends on the facts. Read up on RDR3 and split year cases 4 to 8

hendersontax
Posts: 26
Joined: Wed Jun 19, 2019 5:04 pm
Location: Manchester
Contact:

Re: Employee Based overseas over two years

Postby hendersontax » Thu Jun 20, 2019 8:36 am

I too am in a similar situation.
I have worked abroad feom June 2016 until may 2018, but have to file a self assessment for the 2016/17 as it was the last year I had my LTD company.
Do I qualify for a partial tax year as I was on a NT tax code from when I left in June?
You can't infer this just from the fact you were on an NT tax code. The NT code will have been issued in anticipation of your being non-resident but you will need to make the assessment based on the facts now that the tax year has finished. Refer to RDR3 and check first whether you were non-resident in 2017/18 and if you qualify for split-year under Case 1 for 2016/17.


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