How to treat salary from a non UK employer

UK resident with foreign employment through a non UK employer

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I have a client who works overseas in Egypt but remains UK resident.  He is employed by a non-UK employer who is based in Guernsey.

As this employer is based in Guernsey, my client has no form P60 but has provided me with his monthly payslips and his employer has advised that the payslips show the gross salary received.  Although no tax has been deducted from this, the Guernsey employer has paid tax to the Egyptian authorities on my client's behalf and I have a letter stating this amount of tax.  Although this may be considered a benefit in kind, as the employer is not a UK employer, no benefit has been reported to HMRC on a form P11D.

I am not sure how to show all of this on my client's tax return.  Do I need to gross up his earnings by adding the Egyptian tax suffered to the sums on the payslips and then making a claim for double tax credit relief?

Any suggestions would be greatly appreciated. 

Replies (3)

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By Tim Vane
28th Nov 2016 15:46

Is there a DTT with Egypt and what does it say, if anything, about taxing employment income of a UK resident? Does the Guernsey company have a PE in Egypt? If so, how does that affect the interpretation of the DTT?

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By billgilcom
28th Nov 2016 16:29

You got it in one!!!

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By David Treitel
28th Nov 2016 20:30

Who is preparing the tax equalisation or protection calculation? Under the employer's policy, who gets the DTR - the employer or the employee? You'll need to see the equalisation or protection policy.

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