The treatment of UK non-residents depends upon the length of their stay in the UK. Beware that as an employer you might be liable for additional obligations and may need to register the employee with the local authorities for tax and social security purposes, including checks on an employee’s right to work in the UK.
Do you pay UK tax if you are non resident?
If the non-resident employee’s stay is not long enough to be classified as resident, they are still liable to UK tax on UK earnings. UK personal allowances are only available to certain non-residents.
Do you pay tax on employment income outside the UK?
Earnings for duties performed outside the UK will fall outside of the charge to UK tax on employment income. HMRC adopts the same approach to tax equalisation for non-resident employees as for those resident but not ordinarily resident employees whose earnings are apportioned between sections 25 and 26.
Can a non UK resident be attributable to Section 26?
If any earnings were allocated solely to section 26 as attributable wholly to non-UK duties, evidence should be available to justify the attribution, in the event of an HMRC enquiry. Some tax-equalised employees are not resident in the UK.
When to use UK employment contracts for overseas employees?
Using UK employment contracts for overseas employees If an employee of a UK company is to be based wholly overseas (i.e. outside the UK) it may be unwise to make the employment contract subject to UK law and the UK courts. The better choice may be to make the contract subject to the law of the place of performance of the contract.
Can a UK national work for an overseas company?
The better choice may be to make the contract subject to the law of the place of performance of the contract. In a recent UK case, a UK national who had lived in Lebanon for some time, began working for a UK company. His job was to establish the UK company’s operations in Saudi Arabia.
Can a foreign domiciled employee work in the UK?
However, the requirement that the duties of the employment are performed wholly outside the UK presents problems to foreign domiciled employees whose jobs require them to work partly in the UK and partly abroad. Earnings from an employment with duties performed in and outside the UK would be taxable under section 21 wherever received.
