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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Seconding

Resolved Question:

seconding
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. What is your question?
Customer: replied 1 year ago.
I am from Mauritius and have been seconded to work in UK for another branch under the same Group. My contract is with the Mauritius branch and i get paid in Mauritius and pay my taxes in Mauritius too.
I also hold an italian password ***** mean i can travel to UK and work in UK without visa or work permit.
My wife and kids have moved to the UK with me and I have been working for 6 months now in UK. I am not registered on the UK branch payroll as all the expenses are paid by the Mauritius company. Do I need to declare my mauritius income as a foreign income as i will be considered resident by next April 2016. Some additional information: I am still and will continue to pay tax in mauritius as a resident ; there is no time limit for my secondment (can be more than 2 years ). There is no record that i am working in UK except that i am renting a house for my family in London; every month i transfer some money from my mauritius bank account to my UK bank account to cover for my expenses here; i travel quite frequently to other countries but will spend more than 180 days a year in UK.
Thank you
Customer: replied 1 year ago.
Also note that there is no contract between Mauritius and UK branch for my secondment as it is an internal relocation.
Expert:  TonyTax replied 1 year ago.
Thanks.
Leave this with me while I draft my answer. It will take a while.
Customer: replied 1 year ago.
ok thank you
Customer: replied 1 year ago.
do you need any further information ?
Expert:  TonyTax replied 1 year ago.
Hi again.
Article 15 of the UK/Mauritius double tax treaty deals with employment income:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/432095/Mauritius-UK_DTA_as_amended_2003_2011-web_version.pdf
If you are a tax resident of Mauritius, you will be taxable on your UK earnings there. However, as you are working in the UK, your earnings will be taxable in the UK with credit being given for that UK tax against your Mauritius tax liability. That is, unless (see paragraph 2 (a), (b) and (c) of Article 15) you are resident in the UK for no more than 183 days in the tax year to 5 April 2016 and any other tax year, you are paid by an employer which is not a UK resident and your salary is not funded by the UK branch.
I would have expected your employer to have taken advice as to your UK tax position but it would not surprise me if they had not. You really ought to discuss it with the UK branch's inhouse tax people and/or external accountants. It may well be that your employer has negotiated an exemption from UK tax for you with HMRC.
I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
My employer has not negotiated an exemption from UK tax for me with HMRC.
I will be considered resident in UK for tax year to april 2016, but i dont have any income paid by the UK branch or from any other source in UK. (My income is only from the Mauritius Branch paid in my bank account in Mauritius on which i will pay Mauritius Tax).
Does it mean that at the end of the tax year, i need to fill in a voluntary tax return with HMRC to inform them that i am resident in UK now and on which i will declared my foreign income (salaries paid in Mauritius) , pay UK tax and also deduct any tax credit for the tax already paid in Mauritius ?
Expert:  TonyTax replied 1 year ago.
That's correct. If you exceed 183 days in the UK by 5 April 2016, then the earnings will be taxable in the UK even though you aren't paid by the UK branch and your employer isn't a UK company.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
ok thank you for your help.
Expert:  TonyTax replied 1 year ago.
Thanks and good luck.