Income tax for employees
Working abroad and tax
By Joe Elvin
Article 8 of 9
Working abroad and tax
Use our guide to ensure you don't pay UK tax on your earnings when working overseas.
If you work abroad, your earnings may still be taxable in the UK, depending on whether you’re still classed as a resident for tax purposes.
If you do need to declare income on a UK self-assessment tax return, Which? is here to help.
You can get a head start on your 2016-17 tax return with the Which? tax calculator. Tot up your tax bill, get tips on where to save and submit your return direct to HMRC with Which?.
When am I classed as a non-resident in the UK?
In order to be classed as a non-resident and exempt from UK tax, you will need to:
- work abroad for at least one full tax year
- spend no more than 182 days in the UK in any tax year
- spend no more than 91 days in the UK on average over a four-year period.
For this purpose, you count as being in the UK on any day when you are here at midnight. Any days spent in the UK because of exceptional circumstances beyond your control (such as illness or flight delays) are not normally counted for this purpose.
Find out more: buying overseas property - our expert guide
Tax advantages of working abroad
If you're classed as a non-resident in the UK, you won’t have to pay income tax to HMRC, although you may have to pay tax in the country you're working in instead.
You also won't be subject to capital gains tax on items purchased after you've left the UK, nor on items purchased before you left the UK once you've been a non-resident for five years. You will, however, pay capital gains tax on UK property regardless of whether you’re a UK resident.
Double taxation agreements
If you're taxed on your overseas income both in the UK and in the country where income was earned, you can usually claim tax relief to ensure you're not taxed on the same income twice.
How much tax you’ll get back, and how to claim it, depends on the double taxation agreement between the UK and your country of residence.
The UK has a double taxation agreement with hundreds of other countries.
Find out more: double taxation agreements – an archive of treaties
Voluntary National Insurance payments
If you’re working abroad, you may choose to make voluntary national insurance payments so you remain entitled to the associated benefits, such as the state pension.
Find out more: National Insurance benefits - reasons to make voluntary payments
- Last updated: April 2017
- Updated by: Gareth Shaw