UK employment with non-UK workdays

Produced by Tolley in association with Paul Tew

The following Employment Tax guidance note Produced 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
  • From 6 April 2015: impact of residence and domicile status on taxation of employment-related securities and options
  • Employment-related securities and options tax exclusions: residence up to 5 April 2015
  • More...

UK employment with non-UK workdays

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.

Holding an office or employment is not sufficient to establish that an individual will be subject to tax on worldwide income. 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:

  1. some earnings are taxed when received

  2. some earnings are taxable only when received in or remitted to the UK

  3. 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 their general earnings for the tax year under ITEPA 2003, s 15 other than in the two following situations:

  1. where a non-domiciled employee has chargeable overseas earnings, they are taxable under ITEPA 2003, s 22 to the extent that the earnings are remitted to the UK. See the Remittance basis ― overview with employment focus guidance note.

    Chargeable overseas earnings are defined in ITEPA 2003, s 23 as the general earnings for a tax year in which:

    1. the employee is resident but not domiciled in the

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