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bigduckontax, Accountant
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Taxation on non-residents working company I am a

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Taxation on non-residents working for UK company
I am a non-UK resident but have been offered a job working part of the time in the UK. I don't have a house in the UK or any of the ties that would catch me as a UK resident under the SRT test. 50% of my time would be spent working for the UK company and 50% for their Guernsey company and my contract could be worded to state this (if it doesn't how could I show I wasn't working full time in the UK). The UK company wants to pay me under PAYE and I am told I would be given a non resident tax code. Can someone give me a simplified worked example of the tax Id pay. Assume I got paid £200k in total £100k from UK and £100k from Guernsey. Assume UK tax rate was 50% and Guernsey was 20%. Would I end up paying an average of 35% tax or would I pay zero in the UK and 20% in Guernsey?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
If you are in the UK for more that 183 days in any one tax year you will be subject to UK taxation. If you are being paid under PAYE and HMRC allocate a NT tax code no tax will be deducted, only National Insurance contributions. However, with income as high as 200K I do not think HMRC would issue a NT code, but tell your employer to deduct tax under PAYE and leave you to reclaim it at the years end.
There is a Double Taxation Treaty between the UK and Guernsey which covers Income Tax only. The aim of this treaty is to ensure that the same income stream is taxed in both jurisdictions. Any tax deducted by either country is allowed as a tax credit against any liability in the other. The Channel Islands are not part of the UK nor the EU. In my opinion you would be considered to be paid in full from the UK. On an income of 200K you would be taxed as follows:
Firstly, you will receive no personal allowance as you are over the limit. You will be taxed as follows:
1 - 31865 @ 20%
31866 * 150000 @ 40%
Above 150000 @ 45%
unless HMRC issue a NT code in which case no tax will be deducted. I consider that most unlikely.
I do hope that I have helped shed some light on your position.
bigduckontax, Accountant
Category: Tax
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Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.

Thank you for your support.

Always check your tax code every time it is issued and challenge it if it is incorrect. Your employer must operate the code advised by HMRC unless you have a later code which they have not received as does happen sometimes, in which case the code issued to you but not to them may be used by an employer on a Month 1 basis.

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