Photo by Adolfo Félix on Unsplash
Are you the spouse or partner of a a serving HM Forces about to be deployed, or already on deployment? There is much confusion about what we do about working overseas ... and so here's a basic guide to the facts.
First and foremost, there is NO SPECIAL TREATMENT for Military Spouses/Partners.
If you are able to secure a job with a UK employer, or continue with your current UK employer whilst overseas, there are legal implications to consider. Sadly, it’s not just a case of picking up your laptop and working from an overseas dining room table instead.
Employment Laws: if an employee is overseas, they are in a different legal jurisdiction & so possibly subject to different employment rights than in the UK
Immigration: Does the employee have a legal right to work in the country they are going to?
Data Protection & Security: A data risk assessment should be considered by the employer along with an update to the data protection policy
Health & Safety: a robust ‘home worker’ policy should be in place which covers health and safety when working from home.
Tax: This is largely dependent on where you are resident for tax purposes
Residency status and domicile status are different things. Read more here: Residence, domicile and the remittance basis: RDR1 - GOV.UK (www.gov.uk)
The tax year runs from April 6th – March 6th
ACAS recommend contacting the Law Society to find specialist legal advice and they also advise that both the employee and employer do this to ensure that both parties are covered. Home | The Law Society. Other legal organisations are available of course, you should use your own judgement for this.
If you are facing any difficulties with an employer agreeing to continue your employment during an overseas posting, or you want to discuss anything about working whilst on overseas deployment, please contact the relevant Families Federation.
If your employer has signed up to the Armed Forces Covenant, please contact the Covenant to discuss the issue with them.
Scenarios
I am employed by a UK employer.
You will need to fill in a P85 form: Get your Income Tax right if you're leaving the UK - GOV.UK (www.gov.uk)
You will need to contact the tax office of your new country to ascertain what tax is payable there. The onus is on you to do this, not your employer.
I have my own company registered in the UK and I want to continue working overseas.
There are currently no rules in the Companies Act 2006, or any other UK legislation, requiring a director of a UK company to reside in the UK or make visits here at any time. Similarly, there is nothing to preclude a foreign national from acting as a director of a UK company, whether they live in the UK or elsewhere.
You will need to maintain a UK registered address for the business.
You will continue to fulfil Companies House obligations and pay Corporation tax as normal.
If you are also an employee of your company, you will need to fill in a P85 form & possibly pay income tax in your new country of residence.
If you receive dividends from your UK company, then these are taxable in the UK (so you will need to self-assess)
· I have my own limited company in the UK and my employee is going overseas.
Call the HMRC employer helpline to see what you need to do – they will only give specific advice for specific scenarios. The norm is to give the employee an NT tax code (so no tax is paid in the UK) and the employee then pays tax in their country of residence. The onus is on the employee to sort this out, not the employer.
** Any new tax code should only be applied to the employee once instructed to do so by HMRC **
There is no tax reason why your employee cannot continue to work for you whilst they are based overseas.
I am self employed and am going overseas.
You need to go through the Statutory Residency Test here: RDR3 Statutory Residence Test - GOV.UK (www.gov.uk)
It is likely that you will need to register for tax in the country that you are posted to. This would need to do done by the tax office there and is nothing to do with HMRC.
I am overseas and want to start a self-employed business.
You will need to contact the tax office of the country you are living in to see what you need to do. You won’t need to pay taxes to the UK until you are living in the UK.
Run though the Statutory Residency Test here to ascertain where you are tax resident: RDR3 Statutory Residence Test - GOV.UK (www.gov.uk)
I have moved away from / returned to the UK part way through the tax year
You need to look at Split Residency as you may be liable for some tax in both countries: Tax on foreign income: UK residence and tax - GOV.UK (www.gov.uk)
You will need to let HMRC know you have returned to the UK & also let the country you have moved from know you are no longer living there.
Useful Contact Information
Companies House
0303 1234 500
Income Tax & Crown servants’ helpline
0300 200 3300
+44 135 535 9022
PAYE Employer helpline
0300 200 3401
0044 150 647 6066
RAF Families Federation
01780 781 560
Army Families Federation
01264 554 004
Naval Families Federation
02392 654 374
Armed Forces Covenant
Disclaimer. This information is intended as a general guide. You should always conduct your own research before taking any action. The information here is (to the best of my knowledge) correct at the time of writing (July 2021). Money Bee cannot be held responsible for the tax situation of an individual or for any actions taken as a result of reading this information.