Working Remotely for a Foreign Employer? The Country on Your Payslip Isn’t the Whole Story

Working for a company based outside the UK does not automatically mean your employment income is taxed outside the UK. If you are UK tax resident, you will normally pay UK tax on your foreign income. Your tax residence is determined under the UK Statutory Residence Test and is based on factors including the number of days you spend in the UK and your UK ties.

Where you physically perform your employment duties also matters. If you are living in the UK and carrying out your work from the UK, those UK duties can be subject to UK Income Tax even when your employer is based overseas and pays you in a foreign currency.

The way the tax is collected depends on the circumstances. An overseas employer without a UK presence may not operate UK PAYE, meaning the employee may need to deal with the tax directly, including through Self Assessment. National Insurance can also apply. If the same income is taxed in another country, relief under the relevant double-taxation rules may be available.

The key point is simple: the country of your employer, the currency of your salary and the country shown on your contract do not by themselves determine your UK tax position. Your UK residence, where you perform the work and how the employment is structured all need to be considered.