Non resident employed by UK company

Non resident employed by UK company

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My client moved to live in France a number of years ago.

During 14/15, she started work as an account manager / sales rep for a UK company, mainly covering America.

Salary is paid into UK bank account. The UK employer applied to HMRC for a NT tax code, so no UK tax has been deducted.

I prepare UK Self Assessment return for the client, because she has a rental property here. As part of preparing the 14/15 return, I asked for her days in the UK, so that I could complete the 'Residence, remittance basis etc' pages. 

She spent 95 days in the UK during 14/15 which, in itself, isn't a problem due to her lack of 'ties' to the UK.

BUT, she has told me that 50 of these 95 days were spent working at the head office of the employer.

I am now getting myself confused - does this affect whether the employment income should be taxed in the UK ?  She has spent over 200 days working in either USA or France.

Thanks in anticipation of help.

Replies (6)

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Portia profile image
By Portia Nina Levin
07th Dec 2015 11:41

Yes.

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By KarolMello
07th Dec 2015 12:00

Thanks

Am I correct that I need to apportion the earnings, based upon the days worked inside / outside the UK ........ and the UK part is taxable ?

Thanks

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Portia profile image
By Portia Nina Levin
07th Dec 2015 12:19

You need to apportion between the performance of duties inside/outside the UK, but any duties performed inside the UK that are merely incidental to duties performed outside the UK are treated as performed outside the UK. Do not simply get sucked into a "work days" calculation. See EIM40203 and EIM40204:

http://www.hmrc.gov.uk/manuals/eimanual/EIM40203.htm

http://www.hmrc.gov.uk/manuals/eimanual/EIM40204.htm

See also article 15 of the UK's DTA with France:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...

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By KarolMello
07th Dec 2015 12:37

Thanks Portia

Portia, thanks for your helpful reply.

Based upon info provided by client, and the examples in the HMRC links, it is clear that her duties in the UK were NOT incidental.

Therefore, I will apportion the income.

Thanks again for your help.

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By flurrymc
08th Dec 2015 13:24

I would suggest you also liase with her French and US accountants to ensure that the income is treated the same in all the relevant regimes.

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Portia profile image
By Portia Nina Levin
08th Dec 2015 13:43

Why does it have to be treated the same in all regimes?

The US may have a basis of their own for taxing part of it in the US, and the French may be entitled to tax all of it with credit for the UK and US tax.

That being said, I do agree that advice should be taken in the US and France.

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