Tax implications of working overseas

by | Nov 12, 2021

Arram Berlyn Gardner is a multi-award winning firm of Chartered Accountants, Auditors and Tax advisers.  We have been helping clients with their UK and international accounting requirements for more than 55 years.  In this blog post our team take a look at the implications of living and working abroad be it permanently or on a temporary basis.

Living and working abroad is an exciting prospect that some of us can, unfortunately, only dream about doing.  But working overseas has implications for tax, data protection, residency status and visa status.

In this post we will have a look at what you need to consider if you’re thinking about a temporary stint abroad, and how to avoid any potential pitfalls.

What you need to know about tax

If you’re a UK citizen and you want to work abroad for a while, your tax position is unlikely to change as long as you spend no more than 183 days abroad.

You may need to keep an eye on the double taxation rules. In some countries you might become subject to their tax system while you’re working there.

It’s unlikely that this will happen during a short stay, however, as the UK has a number of agreements with various countries to prevent this. But if you do end up paying tax twice, you may be able to claim relief from HMRC. To do this, you’ll need to submit a UK Self-Assessment tax return.

If you’re spending longer than 183 days abroad, or you’ll no longer be a UK resident. The tax implications are more complex for non-UK residents, which our specialist advisers can help you with.

How going abroad affects your residency status

You can leave the UK for a short time and still be treated as a UK tax resident.

You only relinquish your responsibilities to pay tax in the UK if you cease to be a UK tax resident. For example, this might arise if you’re working overseas for more than a full tax year and you don’t spend more than 90 days in the UK during that time.

Whether or not you’re a UK tax resident depends upon a number of rules relating to the length of time you’re abroad, how long you’ve lived in the UK, and your ties to the UK.

The safest way to ascertain your residency status is to have a look at the Statutory Residence Test.

What about your visa?

Some countries may require a special permit or a visa for you to enter and work there.

“Working” is defined differently across jurisdictions and visa requirements vary. Before you go, double-check the specific requirements of the country you’re working in.

If you’re a non-British national with family abroad, you might consider working from home where your family is based. Make sure you know how long you’re able to stay abroad without affecting your UK visa status.

Data protection considerations

Data protection may not be top of your list when you’re considering a flight to warmer climes, but it’s important to know the rules.

If you’re handling personal data as part of your role, you need to be careful that you don’t contravene cross-border data transfer rules. That can happen if personal data is transferred from the UK to your temporary host country.

To safeguard against this risk, make sure you’re using only approved devices for handling data, and don’t be tempted to use your own personal email address.

Do you require advice?

Working in a foreign country could be the ideal opportunity for a change of scenery, or to visit family and loved ones abroad.

It’s not quite as simple as hopping on a plane with your laptop though.  We’re here to help you think through all the implications and advise you on your personal circumstances.

Please get in touch if you’d like to speak to a member of our tax or accounting team, we can be contacted on 020 7330 0000.

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