Asking them to return to work at their home base in the UK is of course one option. Another option would be to decline the request (and perhaps require the employee to take unpaid leave or use annual leave entitlement if they wish to spend an extended period overseas).
Do you have to pay tax to an overseas employee?
Because your employee is in the foreign country, they will usually have to pay tax, but your company may also have to withhold tax at home. To avoid double taxation, you will need to look into tax treaties between the two countries that allow credits to be used.
What to do if your employee is on an overseas contract?
If your employee is on an overseas contract, it’s possible that the tax authorities in the overseas country will want to make tax deductions from your employee’s income. Contact the Employer Helpline and the overseas authority to make sure you’re clear about your obligations in both countries.
Can You Pay Your overseas employee as an independent contractor?
The GEO is a more complete solution, that offers a local employer of record that is already incorporated and in place to hire, payroll and withhold taxes for your employee. This is far preferable to the remote home payroll option, and avoids non-compliance issues altogether. 4. Pay them as independent contractors
Can a company sponsor an overseas employee to the UK?
The ICT route allows employers to sponsor existing employees of an overseas entity and send them to the UK on assignment. There at two types of Intra-company visas: The Intra-company Transfer visa is for sponsored workers who will be paid the higher of £41,500 or the minimum salary for the job.
What should I do if my employee goes abroad for a year?
When your employee goes abroad, give them a letter stating: Employees who spend most of their time abroad over a period of a year or more may be able to obtain full UK tax relief on their earnings. Ask your employee to complete form P85 and send it to HMRC who will confirm the tax code to use.
Can a US citizen work in the UK?
You won’t have any obligations in the UK for the US employee. What about social security? As a US citizen, your employee is required to pay a percentage of salary for social security and Medicare each month, so that will have to be withheld in the US payroll to meet compliance.
