Tax Rebates & Refunds

Change to expatriate tax rules

April 9, 2013
Posted in Income Tax — Written by Geoffrey

The rules surrounding income tax for expatriate employees have changed starting from 6th April, the official start of the new tax year.

The changes centre on whether an individual can be classed as resident in the UK for tax purposes, and they are expected to have a considerable impact on ‘globally mobile’ employers and employees who split their time between the UK and foreign countries.

Explaining what the changes consist of and what they mean is Davyd Fisher, an expert on expatriate tax affairs, who says:

“For employees working full time abroad, there’s now a defined amount of time people can spend working in the UK before they become resident for tax purposes – with the threshold set at 30 work days.

“If the member of staff goes over a certain threshold, that individual’s ties to the UK will come into question and criteria such as whether the individual has an accessible home in the UK or whether they have a UK resident family will need to be considered, which currently the employer is unlikely to know.”

The new test which HMRC, the body which calculates income tax and processes tax refund claims, will bring in will apparently include objective checks like counting how many days a year a person is in the UK, along with checks on how closely a person is linked with the UK.

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