UK tax issues for cross-border employment
UK tax issues for cross-border employment

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • UK tax issues for cross-border employment
  • Non-UK entities employing UK-based individuals
  • UK entities employing non-UK individuals in the UK
  • UK entities' UK employees operating outside the UK
  • Tax equalisation

Given the ever increasing global mobility of employees, employers could be regularly required to understand and comply with numerous legislative requirements in many jurisdictions. Tax on an employee's earnings will be a crucial issue for both employer and employee and should be fully analysed and understood prior to the commencement of any cross-border employment.

This Practice Note therefore sets out the main UK employment tax issues that may arise when:

  1. non-UK entities employ UK-based individuals

  2. UK entities employ non-UK individuals in the UK, and

  3. UK entities' UK employees operate outside the UK

This Practice Note also briefly outlines tax equalisation agreements.

Other issues for consideration at the outset of any cross-border employment could include immigration issues, employee status and rights, national insurance and social security contributions, pension provision (including auto-enrolment) and other benefits (such as living and travel allowances). These items are outside the scope of this Practice Note.

This Practice Note does not consider:

  1. the tax status of individuals coming to or leaving the UK, for which see Practice Notes: UK tax liability or Residence—issues on leaving the UK after 5 April 2013 respectively

  2. the availability of tax relief pursuant to a double tax treaty, for which see Practice Note: What are double tax treaties?

  3. the taxation of individuals that are employed using intermediaries, for which see Practice Notes: Onshore employment intermediaries—income tax provisions