The taxation of UK employees that work from home or overseas is being looked at by the Office of Tax Simplification (OTS), an independent consultancy that works with the government.
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A consultation into how companies are adapting to the increase in remote working options is being launched, with findings set to be published in spring 2023.
The OTS assessment will look at how working from home or across boards can affect tax and social security for businesses, and their employees. This will also include an examination of the "digital nomad" visa which is now offered as a lure to mobile workers from many countries. The issue here is that these different jurisdictions have uneven and or conflicting tax policies.
The rules for those looking to work for a UK business but from overseas are not exactly simple and have a heavy dependence on the region you reside in. The main issue is the amount of time you plan to work from abroad; if it is just a few days, it is unlikely to trigger any legal consequences, but the longer you do work abroad the greater the risk that you will be subject to taxation in both your country of residence as well as the region your employer is based.
So a short-term period, under six-moths, will be subject to tax in the UK, but you or your employer will have an obligation to report your situation to the relevant financial authority for the country you reside in. Any period longer than six months, but shorter than a year will mean you are still taxable in the UK and also subject to taxation in the country you reside in. To avoid both would require an employee to be working abroad for more than a year.
Around 38% of employees that earn more than £40,000, annually, in the UK are listed as "hybrid workers" and have worked away from the office at some point over the seven days to 8 May, according to the Office for National Statistics.
Typically, employers require staff to request permission to work outside of the UK, though some companies are bucking the trend with more expansive policies. An example of this is Airbnb which has a "work anywhere" policy.
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