UK employees working overseas in specialist sectors

There are special and sometimes complex tax rules for UK employees within certain specialist sectors whose job requires them to work overseas or at sea for long periods of the tax year. This guide tells you where you can get further help.

On this page:

UK Government workers abroad

If you work overseas for an extended period for the UK Government (often referred to as a 'Crown employee' or 'Crown servant') you will have to pay UK tax on your employment income as if you live in the UK (regardless of whether you become non-resident or not 'ordinarily resident' in the UK). At the same time you will retain your UK Personal Allowance, which means you won't pay Income Tax on the first part of your earnings.

These rules apply no matter where you work or how settled you are abroad.

A 'double taxation agreement' will usually ensure you are not taxed on your income from Crown employment in both the UK and the country where you are resident.

Crown employees include (among others):

  • members of the UK armed forces
  • civil servants working abroad
  • diplomats

Meaning of residence and 'ordinary residence'

Personal Allowance - general information

Double taxation agreements

Contact HMRC

National Insurance for Crown employees

There are also special rules regarding National Insurance for Crown employees. To find out more speak to National Insurance Contributions & Employer Office (NIC&EO) - International Caseworker on 0191 203 7010 (+44 191 203 7010 from outside the UK).

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Working for European Union (EU) institutions

If you go abroad to work for an EU institution, you are affected in two ways:

  • You remain 'ordinarily resident' in the UK while you are away, providing you were ordinarily resident in the UK immediately before you went abroad. This means that the UK is considered your normal home and you retain various benefits back in the UK, such as access to NHS healthcare.
  • You remain resident in the UK so long as you visit the UK at least once every tax year. This means you will pay UK Income Tax on your income in the UK. But you will not have to pay UK tax on salaries, wages and pensions paid to you by the EU institution. Instead you will have to pay a 'Community tax', which is deducted at source by the EU body that makes the payment to you.

If you are UK resident and need to know more about how you will be taxed as an EU official abroad, contact HM Revenue and Customs (HMRC).

Ordinary residence - find out more

Contact HMRC

National Insurance for EU officials

There are also special rules regarding National Insurance for EU officials. To find out more speak to NIC&EO - International Caseworker 0191 203 7010 (+44 191 203 7010 from outside the UK).

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If you work on a ship

If you work on board a ship, you may be entitled to Income Tax relief on your earnings - known as the 'Seafarers' Earnings Deduction'. You will have to meet certain criteria, for example:

  • your claim must be for a period of 365 days or more that begins and ends when you were outside the UK
  • you must make at least one journey during the tax year (6 April to 5 April) that begins or ends at a foreign port

For more information on the Seafarers' Earnings Deduction follow the link below.

Tax relief if you work on board a ship

National Insurance contributions if you work on a ship

There are also special rules about National Insurance for people who work on board a ship. For more information follow the link below.

National Insurance for mariners

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Gas and oil rig workers

If you work on an oil or gas rig, you may be entitled to tax relief on your earnings, but the tax rules are complicated. They vary according to whether:

  • the place you work is within UK waters
  • the company you work for is a UK company
  • you are a foreign or UK national
  • the country in which you work has a double taxation agreement with the UK

Whether you are a UK resident working as a gas or oil rig worker, or a foreign national working within the UK or for a UK company abroad, you can find out more about how you will be taxed as a gas or oil rig worker by contacting HMRC.

Contact HMRC

National Insurance for gas and oil workers

There are also special rules regarding National Insurance for gas and oil rig workers. To find out more speak to NIC&EO - International Caseworker on 0191 203 7010 (+44 191 203 7010 from outside the UK).

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Volunteer development workers

If you are sent to work abroad in a developing country by a registered UK charity, you may be able to choose to pay a reduced rate of National Insurance. This is known as 'VDW Class 2' - the volunteer development workers' rate. The rate for the 2012-13 tax year is £5.35 per week.

To find out more speak to NIC&EO on 0191 203 7010 (+44 191 203 7010 from outside the UK).

Check National Insurance rates for current and previous tax years

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