Can I Work For a UK Company From Abroad
If you’re working abroad but on UK Payroll - you may be due a tax refund from HMRC. However, you may trigger certain income tax or social security liabilities in the country you are working in.
Can I Work For a UK Company From Abroad?
If you’re working abroad but on UK Payroll - you may be due a tax refund from HMRC. However, you may trigger certain income tax or social security liabilities in the country you are working in.
In the article, we will discuss how the tax treatment will change in accordance with your residency status and how you can file a UK tax return from abroad. We’ll cover the tax perspectives, but be sure to check the visa rules around working in your preferred country!
Determining Residency Status If You Work For A UK Company From Abroad?
When you work for a UK company from abroad, your residency status may change. As a non-resident, you will only be taxed on ‘UK Sourced’ income such as income from a rental property in the UK. Even if you have a UK employment, you would not be taxed in the UK if all your work days are abroad.
Your residency depends on a number of factors, such as days/workdays in the UK, and your ties to the UK. It’s good to be aware of this as it takes some planning to consistently come under the day count for residence.
If you qualify as a non-resident you should be on an “NT” tax code. This means no tax will be withheld from your employment income in the UK. Often, this is not the case and you end up having tax automatically withheld from your pay.
What Is The Tax Treatment If You Work For a UK Company From Abroad?
Now if you are non-resident, and workdays are abroad - you will not need to pay any tax.
Even if you have a few UK workdays that are classed as UK sourced income, you should be within your personal allowance. In general, if you are a UK/EEA national you will have a personal allowance. Certain other nationalities/residencies also provide a personal allowance as per this link.
Your country of residence will likely tax you on your UK-based income if you are a legal resident in that country, as you are ‘earning’ the income in that country. If you are a dual resident e.g. resident in the UK and in the country you are working in, there will likely be a double taxation agreement with the UK, to avoid you being taxed twice on the same income.
The tax treaties of the UK with other countries may vary. Depending on the agreements, you may be eligible for:
Partial or full relief before you’ve been taxed.
Refund after you’ve been taxed.
How Can You Inform HMRC and File Your Tax Return?
You will need to register for Self Assessment and file a Self Assessment tax return. Specifically you will also need to file form SA109 which covers Residency, and SA102 which covers your UK employment.
Taxd is an HMRC-recognised online software that simplifies the process of informing the HMRC and filing your UK tax returns.
How Does Taxd Make Filing More Convenient?
Those working for a UK company from abroad can use Taxd to file their UK tax return in an efficient and affordable way. The process is simple and convenient.
You are asked a few questions that will tailor the tax experience just for you.
You will provide details about your residency, UK employment earnings and tax paid.
Once you have completed all the questions and provided the required details, you can review your tax return and submit it within minutes.
You will be provided with a PDF version of your tax return and calculations. The HMRC will update your personal tax account within three to five working days.
Key Takeaways
Continuing to work for a UK company from abroad is possible, but you may still be subject to income tax and social security liabilities. You must inform HMRC of your residency status and use the appropriate forms for filing your tax returns. Visit our website with us now and learn how we can help you file tax returns for your UK-based income.
Related resources
Split year treatment applies to individuals who move into or out of the UK partway through a tax year. The tax year in the UK runs from April 6 to April 5 the following year.
As a company director, you have administrative responsibilities throughout the financial year that must be adhered to in order for your business to be operational. It is pivotal you have an understanding of this, especially in the early days of running your business.
Deciding how much to pay yourself as a company director can be a hard decision to make. There are many factors to consider, the financial health of the business, your expenses as well as the future of the business.
