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The rise of remote work has led many people to consider the idea of living abroad while still working for a UK-based company. It is certainly understandable why people would opt for this with the chance to continue their job and salary while living in a different country (likely somewhere sunnier than the UK!). It is not quite that simple, though, especially when it comes to issues like tax. With this in mind, here is a brief overview of what you need to know about working abroad.
Taxable Form of Income
Even if you are a non-UK resident, you will still need to pay tax on a UK income which could be a salary, pension or rental income. This means that no matter where you move to, if you still have a taxable form of income from the UK then you will still be required to pay UK tax on it even if the work is carried out abroad.
Double Taxation
You may also be required to pay tax on your UK income in the country where you live. The UK has an agreement with some countries about double taxation, which involves a tax relief in the UK that allows you to avoid paying tax twice. It also depends on how long you will be working abroad.
If you are working less than 6 months then you will pay a UK tax as normal but not be taxable overseas. If it is medium-term (a year) then you will still be liable for UK tax but with a tax credit and liable for tax in the country of residence. For long term overseas work (at least one UK tax year), you will not have to pay UK tax but will have to pay overseas tax.
What to Do Before Moving Abroad
As you can see, working abroad and tax is a complex issue and it is important that you understand what your obligations are before you move abroad. Many people find it best to speak with a law firm that specializes in tax and/or immigration. They will be able to prepare you for your tax obligations and ensure that everything is above board before you set off. It is also important to speak to your employer to make sure that they are happy for you to make the move.
Working overseas while earning a UK salary is a nice idea and it can work well for some people, but it can also be a complex area particularly when it comes to taxation. You do not want to find yourself in a complex legal issue or find yourself overpaying tax, which is why it is so important to understand what your obligations are before making the move.
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