We live in a world of mobile working where individuals can be sent to work around the world for their companies. In a series of case studies looking at sending workers overseas, we now look at a UK employer sending an employee to work abroad. Again the UK employer does not have an overseas branch or entity and so will not be registered for tax purposes in the host country.
The UK Company is obliged to continue deducting PAYE from the amounts paid to the individual, subject to any changes notified in the tax code. It may be possible, if the employee is going to be overseas for more than a tax year, that they can apply to HMRC to have no tax deducted from their salary. This has to be done by the employee, not the employer. It is also possible, that the host country will want to tax the individual and so consideration will be needed as to whether additional tax is due overseas.
Working in Norway
Where individuals go to a European economic area country such as Norway, there are special rules that govern the National Insurance Contributions paid in these countries. This means that contributions across borders can be taken into account for future pension receipts. It is possible for the individual to elect to continue paying National Insurance in their home country, if they work in more than one country or are abroad for less than two years. The employer can assist with applying for this document, should the individual wish to pursue it.
If you are thinking of sending any workers overseas, please do get in contact with our International Tax Expert, Lucy Orrow to discuss matters with you.
Posted by Lucy Orrow
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.