NT for Paye

NT for Paye

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Hello and sorry if one has already seen this as I am not sure if it has been posted already.

I am living (as well as my family) in France and I left the uk where I was resident (non ord) in summer 2009.
Now the company who wants to hire me is based in uk and wants to process my salary and bonus out of its uk payroll.
My job will involve very little travel to the uk, probably less than 90 days per year, and the rest of my working days will be spent in continental Europe.
I am planning to declare my taxes in France as it is where the centre of my business interest is as well as property and family etc...
I would like to avoid being with held at source in the uk and so I understand there is a tax code that one can apply for (NT) that would mean I am not subject to tax at source in the uk.
Is that correct?
And can I apply for it given my circumstances ?
And will I be subject to uk national insurance contributions or to French in this case ?

Thank you

Replies (3)

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By frustratedwithhmrc
10th Oct 2011 11:14

When you left the UK, did you complete form P85?

Upon your departure from the UK, did you complete form P85?

If not, it is probably worth you completing it now retrospectively. This will at least provide HMRC with the necessary 'lever' to allow an "NT" tax code to be provided.

Equally, since you are French tax resident, you will be able to pay the necessary tax in France under the terms of the UK / French Double Tax Treaty. It is worth reviewing this in the meantime as there may be additional aspects that you may need to consider.

While working less than 90-days in the UK (over a 4-year rolling average) will mean that you do not become UK tax resident again, if you spend any significant amount of time working in the UK above a deminimis limit of 10-working days, then this would need to be declared to HMRC and taxed accordingly, however this can be done under Self Assessment provided the sums are not significant.

Ideally, you should keep days spent in the UK to an absolute minimum and preferably spend them only 'receiving instructions', 'training', etc. such that it is not related to your day-to-day job abroad.

However, what you must not do is give HMRC any information which does not reflect the actuality of your working arrangements as they are likely to check at some point, possibly two or three years down the line.

It seems likely that a statutory residence test will be laid down before the UK parliament as part of the next budget, so it is worthwhile making sure that your arrangements do not fall foul of the proposed arrangements although this is still subject to changes prior to legislation being passed. 

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By Laurent
10th Oct 2011 11:53

Thank you for your quick answer.

But I am not sure I understand the rule re: above a de minimis limit of 10  days and below 90 days.

As per what you are saying I will effectively be taxed in the UK (but not at source) if I spend 85 days in the UK, at  least on a portion of my revenues (would it be on 85/252?).

Did I understand that correctly?

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By frustratedwithhmrc
10th Oct 2011 12:50

Apologies - I was quoting from the proposed guidelines

My apologies, I was actually quoting from the proposed guidelines from the consultation on statutory non-residence.

http://www.hm-treasury.gov.uk/d/consult_condoc_statutory_residence.pdf

In terms of taxation of income arising from UK activities, it would depend to what extent these were substantively UK activities as oposed to activities undertaken in the UK, but in relation to non-UK duties.

I am sorry to be vague about this, but HMRC-6 (which is the relevant publication for non-residence) does not have an explicit example matching your situation.

There is a question (no. 26) on the P85, form "Will you do any of your work in the UK? For example business meetings, seminars or training courses?". My natural presumption is that if there were a number of work days less that those required for residence where activities undertaken in the UK could be taxed in the UK as UK sourced income, however all of this would depend.

If this situation arises, you would be best off speaking to the Centre for Non-Residents to allow them to determine how any UK specific activities should be taxed, but one would expect them to be taxed on a pro-rata basis.

As mentioned previously, it would be best to keep workdays in the UK to an absolute minimum as then there will be less room for confusion or misinterpretation by HMRC.

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