Resident and Non-resident

Resident and Non-resident

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Hi,

I have a client company which is based in UK and provide professional services to various clients in UK and Europe. They have recently taken on an assignment which will last 16 months and will provide services to a company based in Sweden. They took on a sub-contractor four weeks ago who has a bank account in UK and will get paid in UK. The client has asked me if they could pay this sub-contractor gross or they have to deduct tax. I asked them to obtain Unique tax reference number and VAT number from the sub-contractor. The sub-contractor instead of giving them the information, has sent them an email which states "I have dual nationality (British and South African) and I do not have to declare any income in Uk because I will declare all my income in south Africa"

Would you please advise me what to advise my client

Regards,

AZ

Replies (7)

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By qhas
22nd Jul 2015 21:10

Where is he resident!
UK, Sweden or SA ?

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Replying to indomitable:
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By [email protected]
23rd Jul 2015 09:57

At the moment in Sweden. He has not visited UK for the last 18 months ( previously he used to visit because his daughter lives in Scotland). According to him his is registered in South Africa as a tax payer and the last time he paid tax in South Africa as an employee was over 2 years ago.

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By Tim Vane
23rd Jul 2015 10:07

If the work is taking place in Sweden then surely it is not covered by the CIS rules.

If the work is in the UK then he has to register for CIS but I think he needs to do it via the International Tax dept at HMRC.

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By [email protected]
23rd Jul 2015 10:19

How do I contact HMRC international department - is there any direct telephone no?

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Portia profile image
By Portia Nina Levin
23rd Jul 2015 10:35

Why is CIS even relevant

They are providing "professional services".

Is he employed or self-employed. If you are satisfied that he is genuinely not an employee, then that is the end of the matter. Just frigging well pay him.

If he is an employee and you are satisfied that he is not resident in the UK and he will not perform ANY of his services in the UK, do the same.

If he is an employee resident in the UK, but performing all of the services outside the UK, you will need to pay him through payroll and he will have to get an NT code and provide the relevant form (I cannot remember what it is) for NIC purposes.

You might also suggest to your client that they engage a proper accountant.

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Morph
By kevinringer
27th Jul 2015 14:11

CIS only applies to UK construction

Checkout 1.2 of https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil.... Non-resident businesses are dealt with in section 5.1. 

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By Moo
27th Jul 2015 17:56

Don't underrate the Swedes

The guy sounds like a ducker and diver.  Chances are that the Swedish tax authorities will pick up that he is there for more than 6 months and treat him as Swedish resident for the whole period.

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