Information for contractors working overseas

If you are thinking about working abroad through an umbrella or a personal services company, we can help!

We work in partnership with Access Financial and its expertise will ensure that you remain fully tax compliant wherever you are working, without paying more in tax than you need to.

Will I be classed as a UK tax resident?

When you work abroad you may or may not remain a UK tax resident. If you stay out of the UK to work for a full tax year (6th April to the following 5th April) and are not in the UK for more than 182 days in that year, then you may become a non-UK tax resident. This means you are not subject to UK income tax on your income that has arisen while working abroad.

If you do not meet this criteria then you remain a UK tax resident and subject to the UK’s worldwide taxing rules, so that all foreign income will be subject to full UK income tax and social security.

How will I be taxed while working abroad?

Income earned abroad is generally taxed in the country you are working unless:

  • There is no local income tax, as in the Gulf States;
  • Specific local legislation expressly excludes such earnings from local taxation;
  • There is a suitable Double Tax Convention or Agreement (DTC or DTA) in place between the work country and where you are ordinarily resident. This will usually be the UK.
  • In general, if you are seconded by your employer to work abroad for less than six months and there is a DTA in force, you will pay your income tax back home. If you work for periods longer than this, tax must be paid in the work country from the start date of you working there.
  • In order for the DTA to apply, the company you are working for must not have a permanent establishment (PE) created by having a fixed place of business, nor should its centre of management have shifted to the work country. Furthermore the costs of engaging you must not be paid by a business that does have a PE in the work country.

Other considerations

Social costs (which are the equivalent of NICs in the UK) are payable in the work country. The only exception is where a so-called Certificate of Coverage is obtained from your home country or that of your employer.

How we can help?

As part of our best advice service, The One Click Group, alongside our business partner Access Financial, are able to discuss your individual circumstances to advise what working options are best suited to you, whether that be UK Umbrella, UK Limited company or via an overseas vehicle.

Our overseas service includes:

  • Peace of mind that you are working compliantly both in the UK and overseas;
  • UK personal tax return service and overseas income/tax paid;
  • Assistance in notifying HMRC of departure from and return to UK;
  • Advice on the tax, social security and compliance obligations of the country you are working in;
  • Opportunity to discuss tax planning opportunities;
  • An ability to immediately restart contracting at home via your UK or via One Click Umbrella or One Click Accountant when you return – with no setup costs;
  • Dealing with address changes if you move home or leave the UK.

To enquire about working abroad call us today on 01928 232 155, fill in the enquiry form below or request a callback:

To enquire about working abroad call us today on 01928 232 155, fill in the enquiry form below or request a callback: