Paying tax and claiming reliefs when on professional secondment to the UK

Have you been working in the UK, but live elsewhere? For example, are you from India and have you been working on an IT project over here? Then, the chances are you’ve overpaid tax and by…

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Last Updated: 16th August 2022   |   Created: 10th August 2022

Have you been working in the UK, but live elsewhere? For example, are you from India and have you been working on an IT project over here? Then, the chances are you’ve overpaid tax and by using GoSimpleTax to file a Self Assessment tax return, we can help you claim any overpaid tax back.

This could be because you’ve not used your full tax allowance if you’ve worked here for less than 12 months, or you may be entitled to cost of living costs, such as accommodation, etc. Simply complete your details on our trial, and if it shows a rebate simply pay and submit. Refund imminent 🙂 Read on to find out more about tax and claiming reliefs when you’re on professional secondment to the UK.

Professional secondments

There are many good reasons for spending a year or two on a professional secondment overseas, whether that’s in the UK or elsewhere.

Professionally, going on an overseas secondment can enable you to learn new skills, broaden your experience and learn first-hand how your employer’s operation works in another country. It can also allow you to build strong relationships with colleagues in other countries.

All of the above can enable you to provide far greater value to your employer when you return home. But working in another country can bring many personal benefits, too, including the chance to live in a totally new environment, experience another culture, possibly improve your second-language skills, make new friends and visit places you may not otherwise ever see.

Paying tax in the UK

Large numbers of people from other countries come to the UK on professional secondments, whether working for large multinationals or smaller organisations. You may be considering a secondment to the UK and be wondering how much tax you’ll pay or you may already be here and want to know whether you can reclaim any tax if you overpay. Crucially, you’ll want to claim all tax allowances reliefs to which you are entitled, as these reduce your UK tax bill.

When you come to live in the UK on secondment, your income will be taxed if you’re classed as resident in the UK for tax purposes (ie you’re not domiciled elsewhere for tax purposes). As well as wages, taxable income can include bonuses and benefits, any pension payments, savings interest and other sources.

People in the UK pay Income Tax on income above a certain level (their “Personal Allowance” – £12,570 in the 2022/23 UK tax year). This reduces incrementally after £100,000 up to £125,140, after which you don’t get any Personal Allowance. So, what Income Tax is payable?

● If you earn between £12,571 and £50,270 a year, you’ll pay the basic rate of UK Income Tax, which is 20%.
● Total income between £50,271 and £150,000 a year is subject to the higher rate of Income tax, which is 40%.
● Total income of more than £150,000 a year is subject to the additional rate of Income Tax, which is 45%.

Need to know! If you earn additional income which is taxable in the UK, for example, by running your own part-time business, you’ll need to complete a Self Assessment tax return, submit it to HMRC (the UK tax authority) and pay any tax you owe.

Will you pay UK National Insurance?

UK employees who earn more than £242 a week also pay Class 1 National Insurance contributions (NICs – 13.25% on wages of £242 to £967 a week, a further 3.25% on earnings above that, 2022/23 UK tax year). This entitles them to state benefits and pension.

You do not need to pay UK National Insurance if you have documentary proof that you pay social security contributions in the EU, Iceland, Lichtenstein, Norway or Switzerland or if you have a certificate from a country with a social security agreement with the UK.

If you cannot get a certificate or document to prove you pay social security in another country, you usually won’t pay NICs for the first 52 weeks you’re in the UK, if you are sent by an employer in your country to work in the UK temporarily.

If you’re not sure about paying UK NICs, check with HMRC if you’re here in the UK or the social security authority in your home country if you haven’t left yet. Your employer should already know what the rules are and be able to advise you.

Claiming tax relief and overpaid tax

Obviously, you need to ensure that you’re not taxed on the same taxable income or gain in the UK and the country in which you normally pay tax. This is less likely if that country has a ‘double-taxation agreement’ with the UK, which is designed to prevent this.

You may be able to claim relief on income earned outside the UK. Normally, claiming tax relief will get back some or all tax double payments. How you claim is determined by whether your non-UK income has already been taxed. UK government website GOV.uk provides guidance on how to claim tax relief on non-UK income and gains, whether you’ve already paid tax on it or not.

Need to know! If you return to your home country part way through the UK tax year, check that you haven’t overpaid UK tax, because allowances and thresholds apply to the full year.

Temporary Workplace (Detached Duty) Relief

An employee of an overseas company who comes to work in the UK on temporary secondment for up to 24 months may be able to claim Income Tax relief for travel and subsistence via Temporary Workplace (also called Detached Duty) Relief. Temporary Workplace Relief can provide significant tax savings.

● You can claim for the cost of travelling from where you’re living in the UK to your place of work, as well as reasonable accommodation costs (including rent, local domestic rates, electricity, gas, water, etc) and reasonable daily subsistence costs (ie meals, non-alcoholic drinks, etc). You’ll need to retain proof of expenses for which you claim.

You cannot claim the relief if you’ll be working in the UK for more than 24 months. And if, during the 24 months, you find out that you’ll be working in the UK beyond 24 months – you must stop claiming the relief immediately. You have up to four years, following the end of the tax year, to claim any Temporary Workplace Relief to which you’re entitled.

● For further information about Temporary Workplace Relief rules visit UK government website GOV.uk.

What you waiting for? Try it now and see if you’re due a tax refund. You simply pay to submit – we don’t take a cut of your tax rebate, like many others do.

GoSimpleTax is award-winning software that offers you an easier way to complete and file your UK Self Assessment tax return. And to ensure that your tax return is error-free and that you’re claiming all of your allowable and reliefs, why not get your UK Self Assessment tax return checked by one of our experts?

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Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.

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