UK employment with non-UK workdays

By Tolley in association with Paul Tew
Employment_tax_img

The following Employment Tax guidance note by Tolley in association with Paul Tew provides comprehensive and up to date tax information covering:

  • UK employment with non-UK workdays
  • Taxation of UK employment
  • Overseas workday relief
  • Allocation of earnings to UK and overseas duties
  • Dual contract
  • Bonuses
  • Specific employment income
  • Employment-related securities and options
  • Termination payments

In the UK, income that a person receives as the holder of an office or employment is charged to tax as employment income. Employment income is defined in ITEPA 2003, s 7 as either ‘general earnings’ or ‘specific employment income’. Special rules apply to the taxation of general earnings of individuals who are not resident or ‘not domiciled’ in the UK. These special rules do not apply to specific employment income. For more detailed information on types of employment income, see the Taxation of cash earnings guidance note.

The holding of an office or employment is not sufficient to establish that an individual will be subject to tax on all the income arising. The residence status of the individual, the location of the duties, the residence status of the employer and the domicile of the individual may all be relevant in determining the extent of UK taxation. Where the employee is resident and domiciled in the UK, all general earnings are taxable when received. However, where non-residence or non-domicile is involved, the following situations arise:

  • some earnings are taxed when received
  • some earnings are taxable only when received in or remitted to the UK
  • some earnings are not taxable at all

ITEPA 2003, ss 14–41ZA (Pt 2, Ch 4, Ch 5) set out how to determine the amount of general earnings from an employment that are taxable earnings.

Taxation of UK employment

An employee who is resident in the UK is taxed on his general earnings for the tax year under ITEPA 2003, s 15 other than in the two following situations:

  • where a non-domiciled employee has chargeable overseas earnings, he

More on Coming to the UK: