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.
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From 6 April 2013 the rules that determine if someone is resident in the UK for tax purposes have been put on a statutory basis. These rules are known as the Statutory Residence Test (SRT). For the majority of people whether or not they are resident for tax purposes is quite straightforward under the test and their position will not change. For those with complex circumstances the SRT will provide more certainty about their residence status.
To help you understand your tax residence status HM Revenue & Customs (HMRC) have launched an on-line tax residence indicator. This residence indicator will give you an indication of your tax residence status after answering a few straightforward questions such as how many days you spent in the UK, where you have a home and if you have family ties. This is a pilot version. A full version will be released in 2014.
Find out more about the Statutory Residence Test and changes to Overseas Workday Relief by following the links below:
The RDR1 is a guide for residents and non-residents on the residence, domicile and remittance basis rules for tax years 2012-13 onwards. It replaces the booklet HMRC6.
The HMRC6 booklet should be used as a guide for residents or non-residents for information on rules affecting your tax liability in the UK up to the end of tax year 2012-13 only.
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):
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 0300 200 3506 (+44 191 203 7010 from outside the UK).
If you go abroad to work for an EU institution, you are affected in two ways:
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).
There are also special rules regarding National Insurance for EU officials. To find out more speak to NIC&EO - International Caseworker 0300 200 3506 (+44 191 203 7010 from outside the UK).
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:
For more information on the Seafarers' Earnings Deduction follow the link below.
There are also special rules about National Insurance for people who work on board a ship. For more information follow the link below.
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:
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.
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 0300 200 3506 (+44 191 203 7010 from outside the UK).
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 2013-14 tax year is £5.45 per week.
To find out more speak to NIC&EO on 0300 200 3506 (+44 191 203 7010 from outside the UK).