Paying tax and working abroad?

knitnut

Looking for advice please. My husband works full time in UK for a large company. In May this year he went abroad (Italy and Czech Republic) to work (for the same company). He came home in August for about 10 days, the end of October for a long weekend, and is home now for 3 weeks for Christmas/new year. He will be going back to Italy at the start of January and will be away again for several months (probably coming home at Easter for about 10 days or so again). Someone mentioned to him that he should not be paying tax as he is working outside the UK for so long. Is this right? If so, does he contact the tax office?
Thanks in advance

Savvy_Sue

I believe it's more complicated than that: if his employer is paying him in the UK, then that may well be where he should be paying tax. Also, if he's being paid in Italy, it may be that he should be paying Italian tax.

What's almost certain is that he shouldn't be paying tax in both Italy and the UK, because we probably have a 'double taxation treaty' with them, which means that we've agreed that no-one should be taxed on the same amount of money in more than one country.

I'll hope that someone who knows more about this than I do will come along with a more definitive answer, but meanwhile you could look for an Italian expat forum to see what they have to say.

Davide123

If he is at large employer, they should know how to deal with it if he was no resident, ie use nt tax code and not deduct any uk tax.

He would still have to pay tax in the other country, so depending on there rate of tax may not be that much in it.

antrobus

knitnut wrote: »

..... Someone mentioned to him that he should not be paying tax as he is working outside the UK for so long. Is this right? If so, does he contact the tax office?
....

No, he contacts the payroll department of the "large company" which employs him. They likely know all about the tax rules for employees on foreign assignments.

Anyway, to the best of my recollection, you have to work abroad for at least one whole tax year before you can escape UK income tax.

chrismac1

Google "statutory residence test" and pick up one of the PDFs from 2013 onwards for the definitive guide to this issue. The UK statutory residence test came into force on 6 April 2013.

As antrobus has said, in my view your husband is a UK tax resident for 2013-14 tax year. The UK is pretty well unique in having daft dates for the start and finish of its tax year.

I am 99% confident Italy has the sensible dates of 1 Jan to 31 Dec, so am pretty confident he will not be defined as an Italian tax resident for 2013. his employer should be able to advise him on this.

Whoever the "someone" was who mentioned what he or she mentioned, IMHO he or she knows nada about the rules of tax residency.

Cook_County

What tax has he paid in Italy and the Czech Republic? Has he filed tax returns to avoid penalties there?

knitnut

Cook_County wrote: »

What tax has he paid in Italy and the Czech Republic? Has he filed tax returns to avoid penalties there?

First of all thanks to all for your replies.
He only worked for approx 4 months in Prague, the rest of the time he spends in various cities in Italy. No tax returns have been filed in any other country. He does get a 'daily' allowance which is paid to him in his pay (paid directly into his uk bank). but after tax it is not very much - to cover hotel fees, food, laundry, transport, calls home, etc. it was this that one of the other workers queried. He thought that this should be tax free.

Savvy_Sue

knitnut wrote: »

He does get a 'daily' allowance which is paid to him in his pay (paid directly into his uk bank). but after tax it is not very much - to cover hotel fees, food, laundry, transport, calls home, etc. it was this that one of the other workers queried. He thought that this should be tax free.

Again, I think this is not straightforward.

If he was having his expenses reimbursed, then yes, they should be paid free of tax, but he'd need to submit receipts etc.

Daily allowances which don't require receipts to be submitted may well be taxable.

But everyone else on this thread knows more about this than I do, so again I shall hope they will come back to confirm the situation!

John_Pierpoint

chrismac1 wrote: »

As antrobus has said, in my view your husband is a UK tax resident for 2013-14 tax year. The UK is pretty well unique in having daft dates for the start and finish of its tax year.

.

It is all completely logical, to have a tax year starting on 25th of March in an agricultural economy based on shearing sheep; and it all logically fits in with the religious concept that the angel visited the betrothed virgin and set the wheels in motion for for the first Christmas. There is not a lot growing in the previous quarter and its time to cook the books.

Unfortunately Julius Caesar got his leap years a bit wrong, so it was time to adjust the 8 day clocks.

While while the rest of the country lost 11 days, did you really expect the forerunner of HMRC to agree to such a monstrous threat to the Revue:
"You change if you want to ......".

http://en.wikipedia.org/wiki/Calendar_%28New_Style%29_Act_1750

The Parliament held that the Julian calendar then in use, as well as the start of the year being 25 March was
“ attended with divers inconveniences, not only as it differs from the usage of neighbouring nations, but also from the legal method of computation in Scotland, and from the common usage throughout the whole kingdom, and thereby frequent mistakes are occasioned in the dates of deeds and other writings, and disputes arise therefrom.[1]