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Location of employer and effect on liability


Produced by Tolley in association with
Employment Tax
Guidance
tag-icon Brexit

Location of employer and effect on liability


Produced by Tolley in association with
Employment Tax
Guidance
tag-icon Brexit
imgtext

STOP PRESS: At Spring Budget 2024, the Chancellor announced that the remittance basis would be abolished from 6 April 2025, although this only applies to foreign income and gains arising on or after that date. The remittance basis rules still apply to unremitted income and gains arising before that date but remitted later. For more details, see the Abolition of the remittance basis from 2025/26 guidance note.

Taxation of UK employment

Non-resident employees’ UK-based earnings are taxed under ITEPA 2003, s 27. Employees who are not resident in the UK are only chargeable to UK tax on general earnings for duties performed in the UK. For this purpose, the critical test is the place of performance of the duties, not the location / residence of the employer.

An employee who is resident in the UK is taxed on their general earnings for the tax year under ITEPA 2003, s 15 other than in the two following situations:

  1. •

    where a UK resident employee is able to claim overseas workday relief,

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Paul Tew
Paul Tew

Writer and advisor at Paywatch

Paul Tew is a freelance adviser, primarily in the areas of pay, personal taxation and remuneration planning. A frequent contributor to technical journals on pay and benefits issues, having written for the "In Business" section of the Times. Paul continues to supply articles for various recognised professional publications including Pay and Benefits magazine, Taxation magazine and Company's Secretary's Review. Paul also has had several loose leaf and bound books published on a variety of subject matter including PAYE, NIC, Sickness and Maternity Pay.   Paul has written and presented training courses as well as headed up payroll and employment help desks and acted as an assessor for recognised Payroll/HR qualifications. Paul previously worked in the healthcare and oil sectors managing Pay and benefit services, so has many years of experience in dealing with PAYE and employment compliance issues across a broad range of industries and organisations.

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