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Selling up with the fam

Selling up with the fam

Old Dec 7th 2021, 11:09 am
  #16  
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Default Re: Selling up with the fam

Originally Posted by macliam View Post
......But it's a case of "the devil you know", especially if people don't speak or understand Portuguese very well.

I'm not suggesting anyone is thinking of overtly defrauding the tax authorities, just that oftentimes the complexities of working abroad aren't considered beyond the "physical" (or virtual) ability to continue doing the same job and earning from the same source.
Exactly!

My current company (with establishments in PT and DE) has gone fully remote, but has been VERY clear with people that this means fully remote ONLY within the country where they are employed. They are part of a large multi-national, so have access to the legal and financial expertise to understand the complexities
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Old Dec 7th 2021, 12:12 pm
  #17  
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Default Re: Selling up with the fam

The other thing is that for anything above £50K? NHR would be a more beneficial way of taxation.

For anything under £30K there wouldn't be much of a difference, if at all.

Anything between £30-50K the PT tax system would make anyone worse off, but not unbearably.
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Old Dec 7th 2021, 6:16 pm
  #18  
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Default Re: Selling up with the fam

Been following this thread with some interest...

I would agree that it is a lot more difficult than a lot of people seem to appreciate to work for (eg) a uk company while residing in Portugal. Most companies just won't entertain it, for tax reasons but also unless their payroll system is configured for the PT taxation system and there is knowledge in the company around HR / legislation of PT they would just consider it too big a risk. If you are (tax) resident in PT then you pay tax according to the PT system so the company has to make adjustments for that, most just don't have the knowledge to do that. A lot of contract or permanent roles will say "remote" but what does remote actually means? Working from home is a new concept for a lot of companies, many simply are not at a place where they can understand the implications of an employee working from abroad so the answer is a blanket no.

Even if your current employee allows it, consider what happens if you are made redundant or otherwise lose your job or want to move on, how easily can you get another similar job while living in PT for a (eg) uk company.

Look at Indeed, Linkedin, cwjobs etc at remote roles (esp contract roles), the vast majority will say in small print must be based in the uk. If you are a "proper" contractor there is nothing stopping you setting up an arrangement whereby you have the right company structure to meet the legalities if you are resident in PT but even then the client is likely to be uncomfortable with you residing in PT and this may again result in a "no". True "remote" work (eg as a digital nomad) is not so easy to get hold of, and for example for myself when making the move I will be expecting to set myself up as an online freelancer (completely self employed) in my profession as well as having a passive income and topping all that up with the occasional contract role through a company structure. I will likely be expecting it to be much harder to get roles with my PT resident status than it is now!
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Old Dec 7th 2021, 6:24 pm
  #19  
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Default Re: Selling up with the fam

Originally Posted by nb888 View Post
Been following this thread with some interest...

I would agree that it is a lot more difficult than a lot of people seem to appreciate to work for (eg) a uk company while residing in Portugal. Most companies just won't entertain it, for tax reasons but also unless their payroll system is configured for the PT taxation system and there is knowledge in the company around HR / legislation of PT they would just consider it too big a risk. If you are (tax) resident in PT then you pay tax according to the PT system so the company has to make adjustments for that, most just don't have the knowledge to do that.
Apologies, but there is no such thing.

If you work for a UK company, you are on their payroll and you pay tax (and NI if applicable) in the UK.

At the end of the tax year it would be your obligation to declare your UK income in PT (Anexo J, I think).

​​​​​​And, yes, I have seen an UK payslip with the employee's PT address on it, and with UK tax, etc deducted. And that is all the employer company is required to do, save for any automatic exchange of info, which I believe is done b/n HMRC and AT.
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Old Dec 7th 2021, 6:54 pm
  #20  
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Default Re: Selling up with the fam

There are risks for the employer in assuming that it's just an issue for the employee: https://taxsummaries.pwc.com/portuga...rate-residence

"Accordingly, the following situations now constitute a Permanent Establishment in Portugal:
  • Business activities derived from services, including consulting services, performed by an enterprise through its own staff or subcontractors hired with the purposes of carrying such activities in the Portuguese territory, provided that such activities are performed for a period or periods exceeding in the aggregate 183 days in any 12-month period starting or ending in the relevant tax year."

A lot of this is probably very low risk in reality (though possibly high impact). One might hope that with remote work becoming more common it does become less of a horrible, confusing mess in future!
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Old Dec 7th 2021, 6:57 pm
  #21  
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Default Re: Selling up with the fam

Originally Posted by SgtTroy View Post
Apologies, but there is no such thing.

If you work for a UK company, you are on their payroll and you pay tax (and NI if applicable) in the UK.

At the end of the tax year it would be your obligation to declare your UK income in PT (Anexo J, I think).

​​​​​​And, yes, I have seen an UK payslip with the employee's PT address on it, and with UK tax, etc deducted. And that is all the employer company is required to do, save for any automatic exchange of info, which I believe is done b/n HMRC and AT.
Apologies if I am misunderstanding this, I thought the above arrangement would only apply if you are commuting into the UK and / or splitting your time between uk and another country rather than actually living (main residence) and spending the majority of your time in PT under a visa as a tax resident. In my head it seems a bit odd if you are a resident of a country but taxed and pay eg NI if applicable under a completely different reigime when you don't get the benefits of eg the NI contributions eg NHS healthcare because you live in PT, surely you are obligated to pay tax and other deductions in the country you reside in in order to get the benefit of them, but perhaps I have misunderstood the rules, quite likely! Are you saying there is a tax treaty in place where PT will get all the tax they are due via the Anexo J? So extending the principle - if you are in PT for a few years and you become eligible for permanent residency then at that point would you say tax is still to be computed under the uk payroll taxation system since you are now essentially a PT resident?
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Old Dec 7th 2021, 7:01 pm
  #22  
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Default Re: Selling up with the fam

Originally Posted by nb888 View Post
Even if your current employee allows it, consider what happens if you are made redundant or otherwise lose your job or want to move on, how easily can you get another similar job while living in PT for a (eg) uk company.
Well said and you see the same when people take out a mortgage based on their earnings today. Your job might not be secure and tax laws can change, so just be prepared. Regardless what is possible or not, every life and situation is different. Maybe the OP doesn't even speak Portuguese while another person is fluent and could work as a waiter.
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Old Dec 7th 2021, 7:20 pm
  #23  
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Default Re: Selling up with the fam

Originally Posted by nb888 View Post
Apologies if I am misunderstanding this, I thought the above arrangement would only apply if you are commuting into the UK and / or splitting your time between uk and another country rather than actually living (main residence) and spending the majority of your time in PT under a visa as a tax resident. In my head it seems a bit odd if you are a resident of a country but taxed and pay eg NI if applicable under a completely different reigime when you don't get the benefits of eg the NI contributions eg NHS healthcare because you live in PT, surely you are obligated to pay tax and other deductions in the country you reside in in order to get the benefit of them, but perhaps I have misunderstood the rules, quite likely! Are you saying there is a tax treaty in place where PT will get all the tax they are due via the Anexo J? So extending the principle - if you are in PT for a few years and you become eligible for permanent residency then at that point would you say tax is still to be computed under the uk payroll taxation system since you are now essentially a PT resident?
Honestly, the best answer is to talk to a UK and a Portuguese accountant (or someone dual qualified, but they tend to be more expensive). You can't assume that what someone else does is actually correct, or will apply to your situation. But you could read the Blevins Franks book for a start (they suggest some options via Cyprus or Malta companies which make me a bit queasy, but are otherwise helpful): https://www.blevinsfranks.com/produc...g-in-portugal/
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Old Dec 7th 2021, 7:22 pm
  #24  
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Default Re: Selling up with the fam

Originally Posted by nb888 View Post
Been following this thread with some interest...
I would agree that it is a lot more difficult than a lot of people seem to appreciate to work for (eg) a uk company while residing in Portugal. Most companies just won't entertain it, for tax reasons but also unless their payroll system is configured for the PT taxation system and there is knowledge in the company around HR / legislation of PT they would just consider it too big a risk. If you are (tax) resident in PT then you pay tax according to the PT system so the company has to make adjustments for that, most just don't have the knowledge to do that.
I think we may be getting lost in translation.

I read "while residing in Portugal" as "while being Portuguese resident, including for tax purposes"
If you meant "while residing in Portugal and never leaving the country" I withdraw my comments.

I am referring to a case of a person, PT resident for all intents and purposes, who goes to the UK every once in a while and works there for a UK company, is on their payroll, and gets tax, etc deducted from the payroll.

At the end of the year, all UK income (and UK tax, etc paid) needs to be declared in Anexo J - https://info.portaldasfinancas.gov.p..._3_anexo_J.pdf, and normally there is tax credit for UK tax (and NI if any) paid.
That income is added to the global family income and then it is taxed accordingly in PT, subject to the existing rules.

With this regard, the UK employer does not need to have any knowledge of the PT tax system. The payroll department makes a submission to HMRC, they are in a possession of the info that it is about a non-UK resident, and, at least in theory, HMRC should exchange that info with AT.

Whether the above scenario would apply if you only do remote work from PT for a UK company, without even visiting the UK, and for a long period of time, is beyond my knowledge, but I would imagine there would be some issues with that.

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Old Dec 7th 2021, 7:44 pm
  #25  
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Default Re: Selling up with the fam

I'm not convinced about the idea that social security can just be paid in the UK, that would appear to conflict with this:
https://www.lewissilkin.com/en/insig...urity-position

But again, I'd emphasise, nobody on this thread (as far as I am aware) is an expert on this, we all just picked up bits as we went through our own experiences. So please do speak with an accountant!
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