Working Remotely Overseas – Tax & Other Employment Implications

Working remotely overseas sounds ideal, doesn’t it?

However it can trigger all sorts of tax, social security and other legal consequences for you and your employer.

All these should be considered separately. If you intend to spend just a few days working overseas, you’re unlikely to trigger unexpected liabilities. But the longer you work overseas, the greater the risk.

Examples of what to look out for

  • Your presence and activity overseas could mean that your employer becomes liable to corporation tax (or the foreign equivalent), if it amounts to a ‘permanent establishment’ for your employer in that country.
  • The fact you work for a UK employer, under a UK contract and receive your pay into a UK bank account doesn’t generally change that.  It’s imperative to check the rules of the country concerned.  You may continue to be taxed in the UK if you continue to be tax resident here. This is because, like most countries, the UK generally taxes its residents on their worldwide income.
  • It pays to consider Social Security entirely separately from income tax too. Even if you’re not taxed overseas, you might have to pay social security contributions there. you could be liable for UK National Insurance even though you’ve been taxed overseas and not in the UK. If you’re liable for social security overseas, then it’s likely that your employer is also liable for employer’s social security in that country.
  • Check out other stuff, such as Home and Travel Insurance, Employment Law, Data Protection, Health Insurance and Immigration Law.  Do you have a right to work in that country?
  • For example, in Finland it’s commonplace for both parents to take paid leave when their baby is born. Meanwhile, in the US, you’ll receive no national paid parental leave programme at all.
  • Expectations about annual leave, sick pay, employee experience, learning and development and career progression varies hugely from country to country.

Here’s a helpful article!