Hi I would like to know if hiring someone who is not a resident in the UK and pay the taxes for them in the UK, could said taxes be compensated somehow against the taxes that someone would have to pay in their country of residence, if there is in place a treaty for the avoidance of double taxation between the UK and the other state?
Thank you for your answer. I understand that they are not subject to UK tax...please allow me to explain a little:
I have been asked by a friend in Rumania who is an IT company owner...
so it is about software developers... in Romania, the taxes on labor force are very very high - for instance for a salary of 2000 Euro an employer has to pay approx. 85% of the net salary as tax. Normally, because the law permitted this the majority of the IT companies have them employed as authorised natural persons and paid for them approx. 25% as tax. However, this is no longer possible as they now will have to pay taxes as for any other employee, namely 85% tax.
So could we find a way.. paying taxes for them in UK and somehow compensate them against the taxes payable in Rumania?
Thank you for you reply and my apologies for not replying to you any sooner.
I understand your suggestion to pay them through a UK bank but we all know how difficult it is to open accounts for non-residents :)
So to understand correctly - if taxes are paid in the UK, in Romania there will be no other payments to make or will still be taxes to be paid in Romania as well?
Thank you. Misfortunately if we do this we will have to hire and outsource around 200 people, and opening an account for 200 people would be very difficult. :)
Thank you for your clarifications, this was a big help.
Have a nice day