Scenario
- UK employee working for a UK based employer is sent to work in Norway
- All duties are perfomed in Norway
- Norwegian tax is deducted by employer and remitted to Norway
- Employee returns to UK at weekends to be with his family
- HMRC has issued a 0T tax code to UK empoyer
Question - As far as I know the earnings are taxable by Norway and not UK under the DTA but what process does the employee have to follow to avoid UK tax also being deducted at source?
Replies (5)
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Norway
-- Odiri Tax Consultants
If you think Norway has taxing right, you can make an application under the relevant article of DTA to HMRC's expat team. If correct HMRC will issue NT tax code to employer to apply to earnings.
Norway
-- Odiri Tax Consultants
If you think Norway has taxing right, you can make an application under the relevant article of DTA to HMRC's expat team. If correct HMRC will issue NT tax code to employer to apply to earnings.
If he's still resident in the UK
Then a letter should be sent to his local tax office making a claim for relief under the UK/Norwegian Double Tax Treaty as taxation rights under the treaty clearly lie with Norway as that is where the work is being undertaken.
Any Norwegian taxes paid can then be used to offset any UK tax liability, however given that your clients circumstances, it may be best for the to request a Self Assessment tax return so that any underpaid / overpaid taxes can be reconcilled after the end of the tax year. This is tedious if your client is not subject to the Self Assessment regime at the moment, but is the best way of ensuring that "The Right Amount of Tax" is paid.
If your client is claiming non-residence in the UK, then an equivelent letter should be sent to the Centre for Non-Residents.
Letter
-- Odiri Tax Consultants
Letter advising HMRC with reference to relevant article is sufficient to HMRC's expat team ( normally the tax office that deals with employer's payroll).