UK employment tax issues for cross-border employment
Produced in partnership with Darren Oswick of Simmons & Simmons

The following Tax practice note produced in partnership with Darren Oswick of Simmons & Simmons provides comprehensive and up to date legal information covering:

  • UK employment tax issues for cross-border employment
  • Non-UK entities employing UK-based individuals
  • PAYE and non-UK employers
  • Non-UK employer required to operate PAYE
  • Non-UK employer not required to operate PAYE
  • Corporate residence and tax liability
  • UK entities employing non-UK individuals in the UK
  • Residence
  • Double tax treaty
  • Overseas workday relief
  • More...

UK employment tax issues for cross-border employment

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. For more information on some of these, and other items, see Practice Note: Working remotely outside the UK—considerations for UK employers.

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:

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