telecommute tax query
Jan 18th 2016, 7:53 pm
#1
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telecommute tax query
Hi
I am a UK [and Australian] citizen. I have only lived in the UK for 9 months [jan - sept 2014] since Nov 2004. Apart from 2014, I've been living in the US since 2009 . I am classed as a non-resident [for tax purposes] in both the UK and Australia. Australia is my domiciled country even though I was born in the UK.
I'm investigating the possibility of living in either France, Spain, or Italy, but still working for my current employer. The company also has geographical presence in the UK, and getting paid in GBP.
Can anyone advise me on what the tax situation would be, for either a PAYE employee or as a contractor [self-employed] if I telecommute to the UK from one of the countries listed above?
Thanks in advance for any help
I am a UK [and Australian] citizen. I have only lived in the UK for 9 months [jan - sept 2014] since Nov 2004. Apart from 2014, I've been living in the US since 2009 . I am classed as a non-resident [for tax purposes] in both the UK and Australia. Australia is my domiciled country even though I was born in the UK.
I'm investigating the possibility of living in either France, Spain, or Italy, but still working for my current employer. The company also has geographical presence in the UK, and getting paid in GBP.
Can anyone advise me on what the tax situation would be, for either a PAYE employee or as a contractor [self-employed] if I telecommute to the UK from one of the countries listed above?
Thanks in advance for any help
Jan 19th 2016, 6:54 am
#2
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Re: telecommute tax query
Hi
I am a UK [and Australian] citizen. I have only lived in the UK for 9 months [jan - sept 2014] since Nov 2004. Apart from 2014, I've been living in the US since 2009 . I am classed as a non-resident [for tax purposes] in both the UK and Australia. Australia is my domiciled country even though I was born in the UK.
I'm investigating the possibility of living in either France, Spain, or Italy, but still working for my current employer. The company also has geographical presence in the UK, and getting paid in GBP.
Can anyone advise me on what the tax situation would be, for either a PAYE employee or as a contractor [self-employed] if I telecommute to the UK from one of the countries listed above?
Thanks in advance for any help
I am a UK [and Australian] citizen. I have only lived in the UK for 9 months [jan - sept 2014] since Nov 2004. Apart from 2014, I've been living in the US since 2009 . I am classed as a non-resident [for tax purposes] in both the UK and Australia. Australia is my domiciled country even though I was born in the UK.
I'm investigating the possibility of living in either France, Spain, or Italy, but still working for my current employer. The company also has geographical presence in the UK, and getting paid in GBP.
Can anyone advise me on what the tax situation would be, for either a PAYE employee or as a contractor [self-employed] if I telecommute to the UK from one of the countries listed above?
Thanks in advance for any help
You'd do well to post in the three countries concerned. It wouldn't be just the Tax question, but also your residence and employment status to determine how to contribute to your healthcare coverage. There's a knowledgeable member on the France forum who can advise on all these questions, at least for France.
Are you married?. If your spouse doesn't carry a UK or other EU Passport, there would be the "problem" of a Visa.
Jan 19th 2016, 1:55 pm
#3
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Re: telecommute tax query
Hi dmu, thanks for the response and welcome!!
i will repost in all 3 sub forums and see how that goes. in terms of healthcare, i assume you mean for coverage in the 3 countries concerned, not the UK?.. I am married, and my wife is an Aussie so i assume i could apply for a visa once in the country.?
i will repost in all 3 sub forums and see how that goes. in terms of healthcare, i assume you mean for coverage in the 3 countries concerned, not the UK?.. I am married, and my wife is an Aussie so i assume i could apply for a visa once in the country.?
Jan 19th 2016, 3:09 pm
#4
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Re: telecommute tax query
Hi dmu, thanks for the response and welcome!!
i will repost in all 3 sub forums and see how that goes. in terms of healthcare, i assume you mean for coverage in the 3 countries concerned, not the UK?.. I am married, and my wife is an Aussie so i assume i could apply for a visa once in the country.?
i will repost in all 3 sub forums and see how that goes. in terms of healthcare, i assume you mean for coverage in the 3 countries concerned, not the UK?.. I am married, and my wife is an Aussie so i assume i could apply for a visa once in the country.?
You'd have to find out about your OH's visa from official sources (French or whatever Consulate in Australia), although there have been a few threads on the subject in the France forum. This subject might be worth raising in a new thread, also the healthcare contributions for someone living in France but working for a UK company.
Jan 19th 2016, 4:14 pm
#5
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Re: telecommute tax query
I assume that by 'telecommute' you mean 'telework', ie you don't actually physically go to the UK at all.
Normally your tax and social security contributions must be paid in the country where your backside is when you do the work. If you're employed by a UK company but you live and work in another EU state, you can apply to keep paying NICs in the UK but the criteria that you have to meet are quite strict. If you're not currently a UK resident and taxpayer I think it's unlikely that you would meet them. So if you lived in France you would be obliged to affiliated to the French social security system, and UK employers are generally not too keen on this because it would work out significantly more expensive to employ you. The same rules would apply if you moved to Spain or Italy, I don't know how high the contributions are in those countries but I do know the UK has lower social security contribution rates than most if not all EU countries. (Hence why lots of people apply for the portable healthcare document and not all of them get it.)
Tax is a separate issue and is a bit faffy but again, you normally pay tax to the country where you live, so basically you have to apply to HMRC to get this sorted.
All explained here https://www.gov.uk/guidance/paying-e...working-abroad
The rules would be similar for self-employment, for France at least, and if you're not currently self-employed in the UK and especially if this is a permanent move, then I don't think you would be allowed to pay NICs in the UK. But before looking at the rules for self-employment in your chosen state, the first thing to consider is whether it would be appropriate. In France, the difference between employment and self-employment comes down to the relationship and your working pattern - is it an employer-employee relationship where you have specific duties to perform in a specific way at a specific time, and you get paid for doing those tasks at a rate fixed by the employer? Or is it a client-supplier relationship where the client wants a service or product delivered, you give a quote for delivering that service or product, and the client accepts it; and then it's up to you to deliver on time and on budget and make a profit for yourself. There is a temptation to pretend to be self employed in order to pay lower cotisations, but in France this is regarded as "concealed employent" and is fraud. As an employee you have better social protection (pension, unemployment benefit etc) so in fact France is trying to protect you against precarity and exploitation, although unfortunately it sometimes has the effect of preventing you from keeping your job. I don't know if Spain and Italy are as strict on this.
Hope this helps. I know naff all about visas I'm afraid but if you are going to have to get a visa for your wife, that sounds like a good reason to 'do it right' and not bend the rules because I imagine your means of making an income will be scrutinised.
Normally your tax and social security contributions must be paid in the country where your backside is when you do the work. If you're employed by a UK company but you live and work in another EU state, you can apply to keep paying NICs in the UK but the criteria that you have to meet are quite strict. If you're not currently a UK resident and taxpayer I think it's unlikely that you would meet them. So if you lived in France you would be obliged to affiliated to the French social security system, and UK employers are generally not too keen on this because it would work out significantly more expensive to employ you. The same rules would apply if you moved to Spain or Italy, I don't know how high the contributions are in those countries but I do know the UK has lower social security contribution rates than most if not all EU countries. (Hence why lots of people apply for the portable healthcare document and not all of them get it.)
Tax is a separate issue and is a bit faffy but again, you normally pay tax to the country where you live, so basically you have to apply to HMRC to get this sorted.
All explained here https://www.gov.uk/guidance/paying-e...working-abroad
The rules would be similar for self-employment, for France at least, and if you're not currently self-employed in the UK and especially if this is a permanent move, then I don't think you would be allowed to pay NICs in the UK. But before looking at the rules for self-employment in your chosen state, the first thing to consider is whether it would be appropriate. In France, the difference between employment and self-employment comes down to the relationship and your working pattern - is it an employer-employee relationship where you have specific duties to perform in a specific way at a specific time, and you get paid for doing those tasks at a rate fixed by the employer? Or is it a client-supplier relationship where the client wants a service or product delivered, you give a quote for delivering that service or product, and the client accepts it; and then it's up to you to deliver on time and on budget and make a profit for yourself. There is a temptation to pretend to be self employed in order to pay lower cotisations, but in France this is regarded as "concealed employent" and is fraud. As an employee you have better social protection (pension, unemployment benefit etc) so in fact France is trying to protect you against precarity and exploitation, although unfortunately it sometimes has the effect of preventing you from keeping your job. I don't know if Spain and Italy are as strict on this.
Hope this helps. I know naff all about visas I'm afraid but if you are going to have to get a visa for your wife, that sounds like a good reason to 'do it right' and not bend the rules because I imagine your means of making an income will be scrutinised.
Last edited by EuroTrash; Jan 19th 2016 at 4:16 pm.
Jan 19th 2016, 4:33 pm
#6
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Posts: 8,888
Re: telecommute tax query
I assume that by 'telecommute' you mean 'telework', ie you don't actually physically go to the UK at all.
Normally your tax and social security contributions must be paid in the country where your backside is when you do the work. If you're employed by a UK company but you live and work in another EU state, you can apply to keep paying NICs in the UK but the criteria that you have to meet are quite strict. If you're not currently a UK resident and taxpayer I think it's unlikely that you would meet them. So if you lived in France you would be obliged to affiliated to the French social security system, and UK employers are generally not too keen on this because it would work out significantly more expensive to employ you. The same rules would apply if you moved to Spain or Italy, I don't know how high the contributions are in those countries but I do know the UK has lower social security contribution rates than most if not all EU countries. (Hence why lots of people apply for the portable healthcare document and not all of them get it.)
Tax is a separate issue and is a bit faffy but again, you normally pay tax to the country where you live, so basically you have to apply to HMRC to get this sorted.
All explained here https://www.gov.uk/guidance/paying-e...working-abroad
The rules would be similar for self-employment, for France at least, and if you're not currently self-employed in the UK and especially if this is a permanent move, then I don't think you would be allowed to pay NICs in the UK. But before looking at the rules for self-employment in your chosen state, the first thing to consider is whether it would be appropriate. In France, the difference between employment and self-employment comes down to the relationship and your working pattern - is it an employer-employee relationship where you have specific duties to perform in a specific way at a specific time, and you get paid for doing those tasks at a rate fixed by the employer? Or is it a client-supplier relationship where the client wants a service or product delivered, you give a quote for delivering that service or product, and the client accepts it; and then it's up to you to deliver on time and on budget and make a profit for yourself. There is a temptation to pretend to be self employed in order to pay lower cotisations, but in France this is regarded as "concealed employent" and is fraud. As an employee you have better social protection (pension, unemployment benefit etc) so in fact France is trying to protect you against precarity and exploitation, although unfortunately it sometimes has the effect of preventing you from keeping your job. I don't know if Spain and Italy are as strict on this.
Hope this helps. I know naff all about visas I'm afraid but if you are going to have to get a visa for your wife, that sounds like a good reason to 'do it right' and not bend the rules because I imagine your means of making an income will be scrutinised.
Normally your tax and social security contributions must be paid in the country where your backside is when you do the work. If you're employed by a UK company but you live and work in another EU state, you can apply to keep paying NICs in the UK but the criteria that you have to meet are quite strict. If you're not currently a UK resident and taxpayer I think it's unlikely that you would meet them. So if you lived in France you would be obliged to affiliated to the French social security system, and UK employers are generally not too keen on this because it would work out significantly more expensive to employ you. The same rules would apply if you moved to Spain or Italy, I don't know how high the contributions are in those countries but I do know the UK has lower social security contribution rates than most if not all EU countries. (Hence why lots of people apply for the portable healthcare document and not all of them get it.)
Tax is a separate issue and is a bit faffy but again, you normally pay tax to the country where you live, so basically you have to apply to HMRC to get this sorted.
All explained here https://www.gov.uk/guidance/paying-e...working-abroad
The rules would be similar for self-employment, for France at least, and if you're not currently self-employed in the UK and especially if this is a permanent move, then I don't think you would be allowed to pay NICs in the UK. But before looking at the rules for self-employment in your chosen state, the first thing to consider is whether it would be appropriate. In France, the difference between employment and self-employment comes down to the relationship and your working pattern - is it an employer-employee relationship where you have specific duties to perform in a specific way at a specific time, and you get paid for doing those tasks at a rate fixed by the employer? Or is it a client-supplier relationship where the client wants a service or product delivered, you give a quote for delivering that service or product, and the client accepts it; and then it's up to you to deliver on time and on budget and make a profit for yourself. There is a temptation to pretend to be self employed in order to pay lower cotisations, but in France this is regarded as "concealed employent" and is fraud. As an employee you have better social protection (pension, unemployment benefit etc) so in fact France is trying to protect you against precarity and exploitation, although unfortunately it sometimes has the effect of preventing you from keeping your job. I don't know if Spain and Italy are as strict on this.
Hope this helps. I know naff all about visas I'm afraid but if you are going to have to get a visa for your wife, that sounds like a good reason to 'do it right' and not bend the rules because I imagine your means of making an income will be scrutinised.
from the knowledgeable member AKA Eurotrash!
Jan 19th 2016, 9:34 pm
#7
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Re: telecommute tax query
thanks for the reply EuroTrash..
by telecommute i mean - majority of the time i would be physically located in either F, E or Italy, connecting remotely to work on my pc in the London office.... i would be physically working in the UK office maybe every 4-6 weeks or so for a week.
i do undertake a UK tax return every year, albeit for rental earnings. the last year I paid UK income tax was financial year 2014/15. i am currently taxed as a non resident in the US for tax purposes [UN related - complicated]
Also this would not be a permanent move, 18-24 months at most,
does that info make any difference to you?
thanks again,,,
by telecommute i mean - majority of the time i would be physically located in either F, E or Italy, connecting remotely to work on my pc in the London office.... i would be physically working in the UK office maybe every 4-6 weeks or so for a week.
i do undertake a UK tax return every year, albeit for rental earnings. the last year I paid UK income tax was financial year 2014/15. i am currently taxed as a non resident in the US for tax purposes [UN related - complicated]
Also this would not be a permanent move, 18-24 months at most,
does that info make any difference to you?
thanks again,,,
Jan 19th 2016, 10:16 pm
#8
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Re: telecommute tax query
Ah well, if you will be working in the UK on a regular basis then that might change everything, as might the fact that it's not a permanent move.
Maybe your best bet would be for you and your employer to apply for a worker's S1, fill in the form and provide all the details and see what the answer is. Speculating is pointless really because it's an HMRC/DWP decision so the best thing is to ask them. You'll have to detail your expected work pattern over the tax year - exactly how many working days you anticipate spending in each country - and they'll base their decision on that and other factors. But if you already work for the company in the UK, and it's not a permanent move, and you will return to work in the UK regularly, I think there could be a fair chance. If your company has a reason for sending you abroad, maybe to do a bit of local market research, so much the better.
And be patient, because they're not always quick at answering.
Maybe your best bet would be for you and your employer to apply for a worker's S1, fill in the form and provide all the details and see what the answer is. Speculating is pointless really because it's an HMRC/DWP decision so the best thing is to ask them. You'll have to detail your expected work pattern over the tax year - exactly how many working days you anticipate spending in each country - and they'll base their decision on that and other factors. But if you already work for the company in the UK, and it's not a permanent move, and you will return to work in the UK regularly, I think there could be a fair chance. If your company has a reason for sending you abroad, maybe to do a bit of local market research, so much the better.
And be patient, because they're not always quick at answering.
Jan 20th 2016, 3:11 pm
#9
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Re: telecommute tax query
thx euroTrash, i appreciate your comments!!!
