The following Employment Tax guidance note Produced by Tolley in association with Annette Morley provides comprehensive and up to date tax information covering:
Practical issues for payroll operation when employees are leaving the UK are covered in the Outbound employees ― payroll issues and other legislative points in the Reporting requirements on leaving the UK guidance notes.
This section considers opportunities for UK employers to improve the tax consequences for themselves or their employees when the latter are about to depart for overseas employment.
Ensure that all agreements made between employer and employee are set out in writing in an employment contract. That should include stating the obvious, such as whether the employee is actually employed by the UK entity or the overseas entity or both.
Planning opportunities occur particularly where the same employer, or at least another group company, will continue to be the employer of the overseas individual. Nevertheless, some steps will be applicable even if the employee leaves to work for an unrelated overseas employer.
Are any bonuses due? It does not provide any reduction in tax just to delay paying an employee’s bonus or holiday pay until after he has become non-resident. He will be taxed on the basis of where he was resident at the point of his earnings, not where he was resident when he received payment (see the Taxation of cash earnings guidance note). It may be possible to delay a decision on bonuses until after the employee has moved, but care needs to be taken over directors as the trigger point for tax may still be a point before the director’s departure (see the Directors guidance note for the special rules applicable to them). The tax jurisdiction of the new employment country should also be considered. It might be beneficial for bonuses to attach to a greater extent to the employment carried out in whichever is the lower tax rate country. However, this must be borne out by reality and if discretion is to be applied, a written agreement should be put in place beforehand.
Where will the individual’s
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
Terminal loss relief for trade losses in the final 12 monthsTrading losses incurred by a company in the final 12 months leading up to the discontinuance of trade may be carried back for up to three years from the period beginning immediately before that 12-month period. So if the final accounting
IntroductionUK resident individuals who are non-UK domiciled can benefit from the remittance basis of taxation. The remittance basis allows for relief from UK taxation for non-UK sources of income which are not brought in (or remitted) to the UK. A remittance is any money or other property which is,
Duty to prepare trust accountsUnder the laws of England and Wales, trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. This duty is established by a substantial body of case law. In the case of Armitage v Nurse, Millett LJ stated:“Every
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.