Working on UK Payroll but from India ?

BlisteringBarnacles

Posted on bogleheads but realized it is primarily a US forum. Hence trying my luck here Appreciate any and all responses. Cheers

I am on UK payroll but have been physically in Chennai, India for the last 6 months on anxiety related sick leave caused by family health problems. My company has been very kind to allow me 6 months off. We are headquartered in the US with offices all over the world including UK and Bangalore, India.

I just flew back to the UK few days ago. I am wondering if it is possible to be on UK payroll but physically work from Chennai or even Bangalore India for say 6 months. Company is refusing saying there will be "tax issues". Well, for one thing, this Indian financial year (Apr 2023 to Mar 2024) I enjoy a special status called RNOR (Resident but not ordinarily resident) whereby I am Not liable for any personal income tax to India on any of my worldwide earnings. In UK I will be on PAYE anyway. UK office does not need to worry about any Indian employee taxes owed. This will be true for just this financial year.

Also since my company has an India presence so I dont really see what the problem is. People travel on business all the time. For example a UK colleague went to the India office for 2 weeks to guide the development team in India to help deliver solutions to the UK client. I dont think any India tax issue came up regrading this assignment.

I recall during covid time, many employees wanted to work remotely and varous tax issues came up. I never understood it fully. I would think my RNOR status would make it straightforward for this year at least.

The other option is relocating to our Bangalore office on India pay. I am not too worried about India pay. But the work culture is quite hectic there, quite different from UK, and I am not sure I will fit in and be able to handle it at my age (middle age) especially with the family health stress going on. Working for the UK team but physically from India would be best so I can be near my folks, even if it is only for a short term.

So the question is : what exactly is the legal/tax issue with being on UK pay but working from whereever ?

Thanks

JReacher1

You should be paying tax in your country of residence.  

Ultimately though it doesn’t really matter. A lot of UK companies have this policy so they’re not going to change it. 

theoretica

It's also the potential liability and time for the company to be sure they have all employment legislation and tax right.  I believe if a US company (for instance) employs someone who is in the UK they have to give them UK employment rights, minimum wage, holidays...  So by letting employees work from abroad (rather than go on business trips) the company is liable unless they can be sure they have all those things right, and it is a bother, time and expense to check up on all that and as they are the ones liable they won't want to just take your word for things being OK.

TheSpiddalKid

There are genuine issues that can make it difficult for a UK contract person to be able to be posted or to work from another country (these can include tax, company law, data security and data governance, migration and social security, employment law, health and safety law). This list is not exhaustive as specific industries may have other issues too. There is a good legal guide to these issues from Capsticks for the NHS.

https://www.nhsemployers.org/system/files/2022-09/Overseas working document FINAL 230822.pdf

For may organisations, the cost,  number and complexity of these problems, when measured against the risk of retention or loss of an employee, will likely put this issue into the too-difficult-to-do category.

 

Marcon

BlisteringBarnacles said:

Posted on bogleheads but realized it is primarily a US forum. Hence trying my luck here Appreciate any and all responses. Cheers

I am on UK payroll but have been physically in Chennai, India for the last 6 months on anxiety related sick leave caused by family health problems. My company has been very kind to allow me 6 months off. We are headquartered in the US with offices all over the world including UK and Bangalore, India.

I just flew back to the UK few days ago. I am wondering if it is possible to be on UK payroll but physically work from Chennai or even Bangalore India for say 6 months. Company is refusing saying there will be "tax issues". Well, for one thing, this Indian financial year (Apr 2023 to Mar 2024) I enjoy a special status called RNOR (Resident but not ordinarily resident) whereby I am Not liable for any personal income tax to India on any of my worldwide earnings. In UK I will be on PAYE anyway. UK office does not need to worry about any Indian employee taxes owed. This will be true for just this financial year.

Also since my company has an India presence so I dont really see what the problem is. People travel on business all the time. For example a UK colleague went to the India office for 2 weeks to guide the development team in India to help deliver solutions to the UK client. I dont think any India tax issue came up regrading this assignment.

I recall during covid time, many employees wanted to work remotely and varous tax issues came up. I never understood it fully. I would think my RNOR status would make it straightforward for this year at least.

The other option is relocating to our Bangalore office on India pay. I am not too worried about India pay. But the work culture is quite hectic there, quite different from UK, and I am not sure I will fit in and be able to handle it at my age (middle age) especially with the family health stress going on. Working for the UK team but physically from India would be best so I can be near my folks, even if it is only for a short term.

So the question is : what exactly is the legal/tax issue with being on UK pay but working from whereever ?

Thanks

No; the question is whether your employer is willing to do what you want - and they aren't.

robatwork

I know nothing of India working/tax regulations and only a little of EU ones. You could look into setting up your own business (do they have "umbrella" companies there?) which could invoice your UK employer. It may make things easier for the company to just pay invoices, and leave you(r company) to worry about local issues like Tax/health/pension

julesin09

So you want a UK level wage while being based in India? Nice try lol