tornoacasa

My apologies if this question has already been answered, but I was not able to find any definite answer ...

My wife and I have been living and working in UK since 2005; we are both British and Italian citizens.

I am employed in UK.

We are planning to move back to Italy in July 2019 as my wife has been offered a full time job in Italy. I am employed with a permanent UK "domestic" contract and I would like to keep my job in UK while work mostly remotely from Italy, being in the UK office for just 8~9 days per month as my company offer the possibility to work remotely (up to 3 days a week). I was hoping to have the company I work for continuing (as normal) to pay my taxes in UK and then me engaging an accountant in Italy to pay the offset of taxes due to the Italian tax authority (as in Italy the income tax is higher than UK).

Question: Will there be any legal or fiscal issue for the company I work for, given that:

Thank you very much for reading this

spanner5511

I am in a similar situation to you. My wife is Italian and I am British and I have recently obtained Italian residency as we are now going to live permanently in Italy. I too will be working remotely for a UK company but on a part-time basis. My wife also has the opportunity to work for the same company. My questions are whether we will be treated the same for tax purposes as we will be paid in £ in the UK. I appreciate that there is a reciprocal tax agreement between Italy and the UK and that I must pay any differences in tax to the Italian government. What happens about NI (UK) and INPS (Italy)?

I hope someone on the forum can give us some insights in what to expect and what we need to do. I am sure there are several people in situations similar to ours.

tornoacasa

I was thinking of remaining resident in UK via using the 90+ days rule, so to become dual resident in Italy and in UK.
My employer could (as normal) be paying salary and income tax in UK (and NI) and then I could engage with an Italian commercialista to pay the tax offset in Italy. I wonder if this could prevent any issue with my employer in UK?

nicktonight

I think (but I am not an expert!) from the tax point of view things are simple and won't be changed by Brexit. You will just have to pay your tax in the UK, declare your UK income in Italy and deduct the tax you pay in Uk from your Italian Tax bill. You will almost certainly end up paying more tax + an accountancy charge
I have just reread you question and it seems that you are more interested in your employer's obligations. There is a lot of information about your possible future situation on the French forum for instance
Living in France, Employed by UK company - Tax...

and it seems that the most well-informed members say that your English employer will have to pay all the Italian social charges and abide b y Italian rules

GeorgeYoung

My wife wanted to do something similar when we moved to Italy but in the end her employer wouldn't allow it (as a direct employee) for reasons that I don't fully recall but it was due at least in part to her being subject to Italian taxation rules.
In the end, she worked as a self-employed consultant, performing the same work but being paid a contractor's rate and therefore being liable for her own taxation & social security here in Italy (rather than being PAYE).
If your company already has an Italian office or other workers in Italy then you may well be ok but otherwise it might be a bit more fiddly.

tornoacasa

thank you both and you are right: I am more concerned with my employer's obligation.

tornoacasa

I wonder if via remaining resident in UK (using the tests in "RDR3: Statutory Residence Test" - sorry I cannot post links as yet) I would just be satisfying all my employer's obligations as from my employer perspective I would still be UK resident?

Geordieborn

A mine field, this is the gov link to get you to the Guidence link on the RDR3: Statutory Residence Test , but below it, it is telling you you relly need to read the Regs...

tornoacasa

Thank you very much for pointing this out! Which professional figure could help me to go through the Regs? (Finance Act 2013)

Thanks again

Geordieborn

My knowledge of the subject is limited to my own delving into taxation of my income (not derived from employment) and what I’ve come across on a number of forums about the subject. My worry would be the number of posts I’ve read where people say at the end of the day after hiring a “professional” they still fell foul of the authorities and those hired washed their hands of it! Unless your Italian is very good I would imagine if it’s the AdE you are dealing with it could be very difficult. Saying that I also would not want to be an Italian arguing my case with HMRC, it’s bad enough being English and having to do so on many an occasion.
Glad to see you can post links now - good luck!

tornoacasa

Geordieborn, thank you very much for all your inputs and references on this.

You are right, I too would not feel "safe" by just trusting a professional, but it would be good to have the opinion from another pair of eyes and (hopefully :-)) a person with experience matured on-the-field.

I went through the Finance Act 2013 - Schedule 45 (62 pages ... sigh) and as a result I would be UK resident due to the "Sufficient Ties Test", not satisfying neither the "Automatic UK Tests" nor the "Automatic Overseas Tests". I would satisfy actually satisfy 3 ties, when I would just need 2. I am not sure if this could be considered some sort of safety net.

But still my burden is if being UK and Italian resident, employed with a UK domestic contract and mostly living in Italy, would put my Employer under sort of obligation?

Speaking with an Italian accountant, he said that as soon as I pay the offset of taxes to Italy the AdE would be sorted ... but as you said I would not be surprised if he washes his hands of it should any trouble arise.

Thank you again

tornoacasa

Actually, would it be make sense calling HMRC to confirm my understanding of my residence status in light of the Finance Act 2013 / Schedule 45 or it is just a waste of time?

Thanks a lot!

nicktonight

You might find this interesting, though after Brexit it will no longer apply
The European legislation on cross border work Frontier Workers in the European Union

Geordieborn

To me the link (which is great –thanks) carries a lot of weight, but it also shows just what a complex subject it is and just how much is still not clear-cut. The OP wants to live in one country and earn in another. Potentially using resources of the country of residence, but paying the bulk of tax to the country of work. However there is no benefit of the resources of the country of work for the tax paid. I just wonder if the uproar of Brexit would have been nothing compared to the alignment of taxes within the EU had/if the UK stayed/stay….

tornoacasa

Thank you very much both for the warnings and links!

In the following post there is an example of UK/EEA frontier worker, employed in Northern Ireland and living in the Republic Of Ireland - https://www.litrg.org.uk/tax-guides/...-border-worker - I believe it is an interesting read even if it is not very detailed.

Also, I have found a lot of information regarding living in an EU country and working in another here - https://europa.eu/youreurope/citizen...s/index_en.htm