How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3372
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I have a question concerning double taxation between the UK

Resolved Question:

I have a question concerning double taxation between the UK and Italy. I'm a British citizen with a job payrolled by a London based company. However, I work in Live TV and we have to travel to countries across the world to produce the live broadcasts from location.
Due to the demands and difficulties of travelling so often (and working unsociable hours and weekends) we are granted the ability to work from home when not at a tournament and therefore on what we call an 'off-week'.
I am therefore researching the possibility of fulfilling a lifelong dream of moving to Rome. I would be living there during my time in between travelling to tournaments and therefore would seen to be working from home in Rome. However, I would still be payrolled in London.
The time spent in various countries in a year is very difficult to calculate as it depends on what events I am scheduled on and the roles I fulfil at those events which would impact on how much if at all I would need to be in the office. However, I good guide would be as follows:
- 90 days in UK (including time in London office (20 days), UK tournaments (50 days), time in transit through London* (10 days) and non-work visits to family/friends (10 days))
- 120 days 'abroad' (in various countries, all work days)
- 155 days in Italy (including all free time (115 days) and working from home (40 days))
* For certain European events, I would have to fly in to London the night before, in order to catch a flight out of London as paid for by work on a Wednesday morning to reach the tournament abroad. Similarly, work would pay to get me back to London on Sunday evening and I would then catch a flight the next morning back to Rome.
My current salary is £28,000 with an annual £3000 (taxed) bonus for travelling more than 100 days in a year. That is a fixed rate regardless of where and how much we work abroad. I know there are various stipulations regarding how many days you must be present to have to pay tax but I'm worried I wouldn't be present in either the UK or Italy for the stipulated time.
So would I pay tax in Italy as it would be the place I spend the most time? Or would I pay tax in the UK as I receive my income there from my London based company?
I looked at the double taxation treaties advice from HMRC and there is some thing about having to be N and R (a national and resident) in order to receive full relief from paying UK tax, which I would not be as I would not qualify as an Italian national, simply a British citizen resident there. As such I am worried that if I were to be taxed under the Italian system I would also be liable to tax in the UK regardless?
Finally, if I were to be taxed in Italy how much would I expect that to be based on my current income, what would be my post tax income?
Many thanks for your help and time, it is much appreciated!
Submitted: 6 months ago.
Category: Tax
Expert:  bigduckontax replied 6 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

You are being paid by an UK organisation, presumably through PAYE. If you move to Italy this will continue. If you live in Italy more than 183 days in any one tax year you will be subject to Italian Income Tax (IT). These rates are rather more onerous than their UK equivalents, up to some 38% on your level of salary. Under the Double Taxation Convention between the UK and Italy the same income stream can only be taxed in one jurisdiction. This is achieved by means of tax credits, the tax paid in one country being allowed as a credit against the liability in the other. As the Convention does not protect you from differences in rates of taxation you will finish up having to pay out a little more to Italy.

If you become non resident in the UK through the P85 procedure you can only enter the UK for 91 days in any one tax year to maintain your non residential status. Not that this matters a fig as if you are going to pay Italian IT you are going to have an additional liability anyway. If you live under the 183 days in Italyyou are only liable for Italian IT on the money earned in Italy.

You may find the following advice from Your Europe of assistance.

http://europa.eu/youreurope/citizens/work/taxes/income-taxes-abroad/italy/index_en.htm

I do hope that you find my reply of assistance.

Customer: replied 6 months ago.
Thank you for your reply, however I'm still confused. As I mentioned, I would not be present in Italy for more than 183 days, so am I right in assuming that I would only pay tax on the days I worked from home (in Rome?). Under this presumption, would I pay tax on the rest of my income under the UK rates? Even if considered a non-resident as I would be there for less than 91 days?If I were to find myself in the UK for more than 91 days would that mean that I would be taxed under the UK system and not the Italian system?
Expert:  bigduckontax replied 6 months ago.

If you are present in Italy for less than the 183 days then you only pay Italian IT on the income you earned in Italy. You must pay tax somewhere, that is a general principle. You cannot swan about the globe simply avoiding tax from country to country by being non resident. In your case, as you are paid by an UK based organisation, your tax base will be deemed to be the UK and the P85 non residency process would be a dead duck. If you overrun the Italian 183 day rule (this sort of rule is very common world wide) then you will be liable to tax in both countries and the Double Taxation Convention will kick in to protect you.

Please be so kind as to rate me before you leave the Just Answer site.

Customer: replied 6 months ago.
I have two more questions as I'd like to be as certain as possible:
1. So if I were present in Italy for less than 183 days, the fact that I might not be present in the UK for more than 90 days would not be an issue and I would pay UK tax regardless as I am payrolled in the UK? Is this a correct interpretation?2. I understand that I would only pay IT for the days worked from home in Italy, would I also be taxed for these days in the UK? How would I or my company declare to the Italian tax authorities which of the days I was present in Italy I actually worked on and wasn't say on leave or taking days in lieu?Many thanks for your continued time and effort in helping me with this.
Expert:  bigduckontax replied 6 months ago.

1. Yes, you must be taxed somewhere. The 93 day rule (actually 91) only comes into play if you seek to have non residential UK tax status through the P85 process which in your situation will not be tolerated.

2. As you are being paid by an UK organisation through PAYE then there will be an element of double taxation, but the tax credit system under the Convention will smooth out the process. You, not your company, would have to make the necessary declaration to the Italian tax authorities.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3372
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 6 months ago.
Wonderful, thank you for helping me on this!
Expert:  bigduckontax replied 6 months ago.

Thank you for your support.

Expert:  bigduckontax replied 6 months ago.

And your generous bonus.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions