This Tax Tip is brief compared to the vast subject matter it relates to. As the BBC often says after complex dramas, please do be in touch if any of the issues mentioned here affect you.
If one of your employees works abroad for 183 days in any 12 month period, perhaps during the pandemic or in the future, they are likely to be charged income tax in the country they are working in. In the EU/EEA this usually requires a local registration by the employee to pay the local income tax. However in some countries the employer has to make arrangements to deduct and pay tax from day one. In either case, UK tax may not be due (or may be reduced) because of the non-UK tax being paid.
For social security purposes, the situation is even more complicated. Employees living in EU/EEA and some other countries may continue to pay UK national insurance until 31 December 2021. After that date, most workers will have to pay local social security (in the country they are working in). These contributions have to be arranged and paid by the employer. For employees working in the rest of the world a social security liability can exist in the country they are working in AND in the UK for up to 52 weeks.
As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.