Can I Work From Overseas?
Can I Work From Overseas?
One thing that can be said for the past year is that it has completely changed our perception on the traditional “working life” and forced us all to utilise technology to its full potential to facilitate the remote working scenario. Whether it is an employee who is now stranded back in their home country due to travel restrictions, or somebody who is working remotely and having dreams of better times ahead where they can be sitting in sunnier climates while doing their job, the question that has naturally arisen is, can I actually do my job from overseas?
Unfortunately, it is not as simple as “hey I can perform my job remotely, therefore I can work from anywhere in the world!”, as nice as that would be! There are both legal and taxation implications that both you and your employer will need to consider. Ultimately the decision is one for employers to make following discussions with employees and ensuring that all the legal implications have been considered and professional advice has been sought.
Firstly, your intention when leaving the UK for another country is important, was this always meant to be a short-term situation or are you planning on becoming a tax resident in your new country? Many countries have a double taxation agreement with the UK though that ensures you only pay tax in the country you are resident in for tax purposes and so you do not pay more tax than necessary.
If you are working overseas for a short period of time, say less than six months, you are likely to only be liable for tax within the UK. The longer you are out of the country though the more likely it is that you would need to pay tax in the country you are now living in, and the risk becomes significantly higher once you spend more than 183 days in the new country (around six months).
Employers paying employees based overseas also need to consider the risks for after a certain amount of time it may be expected that they need to set up a payroll in the country the employee is now based in.
It is also important for employers to consider the HR perspective for employees wanting to be based overseas. Remote working has created its own set of challenges when it comes to employee welfare, and the employer still has a duty of care to its employees that needs to be observed despite the distance.
Some things you may need to consider as an employer are, how much digital oversight do you have on your employees? Are you asking employees to complete risk assessments on their work environments? If your employee will be in a different time zone, will this manageable? What are the local health and safety requirements in the new country?
If it is confirmed that an employee will be based overseas, it is advisable to give them a letter stating:
- the date they went abroad to work
- their gross pay from the start of the tax year to the date they went abroad
- the tax deducted from the start of the tax year to the date they went abroad
It is important to note that we are not tax experts and whatever your situation is, it is really important to seek professional advice on all of the implications, both within the country you are based in and within the UK.
Here are some helpful resources:
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Take care and we hope to see you soon!