If you plan to work abroad for some time, there are tax considerations you have to take into account. Whether it’s UK tax for foreign nationals, or Self-assessment tax return advice, we cover the basics below so that you have an understanding of what is required.
What Do I Need to Consider if I Am Working Abroad Temporarily?
If you work abroad, you are likely to be taxable in the overseas country. If you work abroad for less than a complete tax year or on a casual basis, you will be taxable in the UK. If you work abroad full-time for a complete tax year, and spend fewer than 91 days in the UK and have fewer than 31 UK workdays during the tax year, you cease to be a UK resident and are not liable to UK tax on earnings outside the UK. If you leave the UK in the middle of a tax year to work overseas, you could ‘split’ the tax year into a resident and non-resident.
What Do I Need to Do Before I Go Abroad?
The key things to consider are whether you need to register for Self-Assessment, and whether you need to file a form P85. You should register for Self-Assessment if you work abroad, unless you cease to be a UK resident and do not expect to have any income taxable in the UK while overseas. The best Self-assessment tax return advice is to complete your tax return at the end of the tax year; your refund will be dealt with.
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What is My Tax Residence Status?
Your tax residence status affects whether you pay tax in the UK on your foreign income. If you leave the UK to work abroad temporarily, it does not mean you become non-resident in the UK for tax purposes. If you are non-resident in the UK for tax purposes, your foreign employment income earned while non-resident is not taxable in the UK, but is likely to be taxable in the foreign country. You are taxable in the UK on income such as UK bank interest and rental income.
What is My Tax Position if I Remain Resident in the UK for Tax Purposes?
If you are a UK tax resident working overseas, a UK tax liability will arise on your foreign employment income earned while in the UK. You may also have to pay tax in the other location. The UK has double taxation treaties with other countries, which aim to prevent double taxation. UK tax for foreign nationals is rare.
Related Post: UK Taxation for Foreign Residents