Paying tax in two countries.

e-p-k

Hi,

I work offshore on a drilling rig in Norwegian waters, work for a Norwegian company, have a Norwegian contract, paid in Norwegian Kronner and pay full Norwegian tax.

With current exchange rates, my yearly salary is approx £70K.

I live in the UK when not at work and it will be more than 180 days per year in the UK.


If I was to do some ad-hoc work in the UK during my time at home,1 or 2 weeks work per year, what would be my UK tax situation ?

chrismac1

You already have a UK tax situation whether you work in the UK or not. Residency is not just as simple as "number of days in the country" but I'm going to guess that you have a great many more connections to this country than Norway and that under UK law you are therefore a UK resident and not eligible to claim non-domicile status i.e. your parents are both UK born and bred too (which is in itself a great simplification of the rules on domicile).

On the basis that you are for tax purposes a UK resident you pay tax on your worldwide income. The UK has a double taxation treatment with Norway, and there is a box on the tax return form for you to put the Norwegian tax you've suffered and hence not get taxed twice. The UK stuff will either by UK PAYE or self-employment income depending on your employment status for the work you are doing.

John_Pierpoint

Do rig workers get a special deal like Sailors?

Mahmood_Reza

Employment income manual gives some useful info on North Sea and other offshore oil and gas workers at

http://www.hmrc.gov.uk/manuals/eimanual/eim65799.htm

e-p-k

chrismac1 wrote: »

You already have a UK tax situation whether you work in the UK or not. Residency is not just as simple as "number of days in the country" but I'm going to guess that you have a great many more connections to this country than Norway and that under UK law you are therefore a UK resident and not eligible to claim non-domicile status i.e. your parents are both UK born and bred too (which is in itself a great simplification of the rules on domicile).

On the basis that you are for tax purposes a UK resident you pay tax on your worldwide income. The UK has a double taxation treatment with Norway, and there is a box on the tax return form for you to put the Norwegian tax you've suffered and hence not get taxed twice. The UK stuff will either by UK PAYE or self-employment income depending on your employment status for the work you are doing.

Hi, Thanks for that.

For arguments sake, If I was to earn £4000 before tax for my ad-hoc work in the UK. What rate of tax would I pay on that £4000 ?

If my earnings from Norway are taken into consideration, would I automatically be on the higher tax bracket ?

chrismac1

Yes, your highest rate of tax will apply here - but you'll still get the 6,475 tax-free allowance. You claim the Norwegian tax as foreign tax credit relief. I've never done a return for an oil rig worker, but having checked these were specifically excluded from Seafarer's Relief.

e-p-k

chrismac1 wrote: »

Yes, your highest rate of tax will apply here - but you'll still get the 6,475 tax-free allowance. You claim the Norwegian tax as foreign tax credit relief. I've never done a return for an oil rig worker, but having checked these were specifically excluded from Seafarer's Relief.

Yes the merchant navy seafarers relief is not applicable to oil rig workers.

I thought if I did some work in the UK, and kept the earnings below the £6475, I would not pay any tax on it.

But if they take my Norwegian earnings into consideration, and tax me on the higher level it does not seem so appealing now.

There is various UK oilrig recruitment agencies offering me some ad-hoc work, but I need to be careful to keep my Norwegian earning to 90% or above of my world wide earnings, This mean I am applicable for many of the Norwegian benefits.