Tax: Working for short periods back in UK
Oct 25th 2011, 8:55 pm
#1
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Thread Starter
Joined: Oct 2011
Posts: 1
Tax: Working for short periods back in UK
Hi all,
I have a question about Double Taxation.
I am on a secondment to a US branch of my global firm. I have been here for 2 years now, including one full UK tax year. I broke residency when I left and filled out my P85 form. I filled out a Self Assessment form last year and reported no UK income and just my pennies of bank interest. I pay full US taxes on all my income, which is paid in US in dollars.
I have just found out that my firm want to second me to work back in the UK for a UK company for 3 months. It won't be enough to make be lose US residency, but it will be "income arising in the UK", since I'll be doing work in the UK. I don't believe I can claim it as merely "incidental".
So here's my questions:
1) Do I have to pay UK tax on my US salary for the time I work in UK?
My understanding is no, based on the terms of the Double Taxation Agreement as I'm there for less than 183 days (and pass the other criteria), so if so...
2) Do I need to declare this work on my Self-Assessment and then apply to get it reclaimed, or can I under terms of DTA just leave it off the form? The Self Assessment form asks for number of work days in UK so it will stick out a bit, but there is a box to explain any details.
3) One thing I wasn't clear of from the legalese of the UK/US Double Taxation treaty is should the income tax for this work ultimately go to UK and be subtracted from US taxes, or be paid to US and UK gets nothing? I have tax deducted at source by my employer in US, which is trued up in my year-end tax returns where I'd make any necessary adjustment.
Many thanks for any help - I've spent all day reading treaties and other people's experiences on forums!
I have a question about Double Taxation.
I am on a secondment to a US branch of my global firm. I have been here for 2 years now, including one full UK tax year. I broke residency when I left and filled out my P85 form. I filled out a Self Assessment form last year and reported no UK income and just my pennies of bank interest. I pay full US taxes on all my income, which is paid in US in dollars.
I have just found out that my firm want to second me to work back in the UK for a UK company for 3 months. It won't be enough to make be lose US residency, but it will be "income arising in the UK", since I'll be doing work in the UK. I don't believe I can claim it as merely "incidental".
So here's my questions:
1) Do I have to pay UK tax on my US salary for the time I work in UK?
My understanding is no, based on the terms of the Double Taxation Agreement as I'm there for less than 183 days (and pass the other criteria), so if so...
2) Do I need to declare this work on my Self-Assessment and then apply to get it reclaimed, or can I under terms of DTA just leave it off the form? The Self Assessment form asks for number of work days in UK so it will stick out a bit, but there is a box to explain any details.
3) One thing I wasn't clear of from the legalese of the UK/US Double Taxation treaty is should the income tax for this work ultimately go to UK and be subtracted from US taxes, or be paid to US and UK gets nothing? I have tax deducted at source by my employer in US, which is trued up in my year-end tax returns where I'd make any necessary adjustment.
Many thanks for any help - I've spent all day reading treaties and other people's experiences on forums!
Oct 26th 2011, 12:47 am
#2
Yes, I know i'm awesome.
Joined: Jan 2011
Location: Twin Cities, Minnesota
Posts: 624
Re: Tax: Working for short periods back in UK
I would try calling HMRC and discussing your situation with them.
Oct 26th 2011, 12:50 am
#3
Forum Regular
Joined: Oct 2011
Posts: 142
Re: Tax: Working for short periods back in UK
I can't help you with an answer to your problem (sorry!), but could you not ask your employer to get your taxes for the relevant year done by a firm of accountants? My OH's company used PWC to do his taxes for him while we were on an expat package (tax equalization and all that). At least you'd know that it was correct on both sides of the Atlantic.......
Oct 26th 2011, 5:32 pm
#4
Senior Member
Joined: Apr 2008
Location: Manhattan
Posts: 2,913
Re: Tax: Working for short periods back in UK
If you need a good accountant who is very knowledgeable on both the UK and US side of things I highly recommend Pete Newton,. www.doug-tax.com. He is an expat that I found on here that does mine and quite a few others taxes on here.
