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Employed by a UK company but working abroad

Employed by a UK company but working abroad

Old Sep 24th 2020, 3:30 pm
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Default Employed by a UK company but working abroad

Hi

I would like to know if anyone has experience in working abroad for a UK employer. For example, a 6 month contract working for a UK company in another country remotely. How does the income tax and national insurance contributions work? Should the salary be paid in GBP or local currency?

Thanks!
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Old Sep 24th 2020, 4:54 pm
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Default Re: Employed by a UK company but working abroad

If you are living and working outside the UK but working for a UK employer you shouldn't be on the UK payroll, and if you are you will need to complete a UK tax return to reclaim income tax deducted for which you were not liable. Ideally you would be set up as an independent contractor, and paid gross in the UK.

AFAIK the NI is not reclaimable, but that could, perhaps, go towards a UK state pension (subject to a minimum ten years of contributions).

Then you will need to pay income and payroll taxes (local equivalent of NI contributions) in the jurisdiction where you are living and will likley be assessed as de facto self employed.

Contrary to popular rumour, you cannot, or at least
shouldn't, just voluntarily pay tax in one country and then just deduct the tax paid erroneously from the tax due in another country.

Where you are paid (bank account credited) and the currency you are paid in, is irrelevant for determining where you are liable for taxes.

Last edited by Pulaski; Sep 24th 2020 at 5:07 pm.
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