UKH

I expect a fair few people on here would like to work remotely in Kalymnos or Chamonix for a few months per year, but my understanding is that it gets quite complicated with taxes, both personal and business.

There's an article on the BBC about a guy who owns a large company, all his employees work from whereever.

https://www.bbc.co.uk/news/business-57517669

So, where is his business tax resident? If it's UK, but he spends a few months in the year roaming about Spain, isn't the Spanish government going to ask questions? He's a self made billionaire and his company is worth a few billion; even getting two weeks worth of taxes from him would be worth it.

Also, how can he work from an AirBnB, aren't there often legal restrictions about where you can make your office? If it's a residential building, won't it need a change of use if you're running your business from there? Fair enough if it's a small business making cup cakes, but a 4 billion pound business?

How does it work with health benefits, pension contributions, holiday entitlement? If I work in France with many weeks holiday pa, but then decide to spend 6 months working in the US, will my US colleagues be upset that I'm getting twice as much holiday?

Does anyone here have an employer who has worked out a solution to enable a nomadic lifestyle? Or are they just winging it? Or do most (as at least 2 of my friends have) just lie to their employer?

In reply to JuneBob:

Businesses are automatically assumed to be tax resident where they are incorporated under UK tax law. There’s a further test around where management control is exercised (where board meetings take place), but this isn’t applicable in most cases (although I’ve been explained it below).

If you own a UK company and hold all of your board meetings in Spain the Spanish authorities might challenge you and potentially you’ll have to pay Spanish corporation tax. However if you take an easyJet flight back, land in Gatwick, hold your board meeting there, then jump straight back on the plane you’re in the clear.

Personal residency is a bit more complicated. The rules are here if anyone of interested (https://www.gov.uk/tax-foreign-income/residence).

It’s quite hard to get rid of your UK residency (you really can’t spend much time on the UK), and if you’re taking dividends from a UK company it would be completely pointless unless you change your domicile.

I don’t really know anything about the practical employer/ employee considerations. I assume payroll and HR get really nervous about you accidentally becoming tax resident in another country. However if you’re dealing with a small company with flexible policies and you can prove you won’t become tax resident in another country (and possibly pay for the tax advice yourself to prove this) I can’t see why it would be an issue.

In reply to JuneBob:  If you go thro' what you've written, and  the examples you give, most of the answers fall off.

If you're only spending a couple months in France, thats on a tourist visa, so not much interest.  If you want to spend more than 6 months then you have a residency issue to deal with, and tax issues to follow.

On what visa would someone choosing to work 6 months in the US get in?  They are quite strict.  I've known enough people expat to the US to know the holiday things isn't a big deal..

In reply to JuneBob:

if you spend more than 180 days at sea you don't have to pay any taxes! how far will your wifi stretch?

In reply to VSisjustascramble:

We employ a couple of guys in that situation. We tell them that they should stay in the UK long enough to establish tax residence will pay their taxes through our payroll. If they happen to spend enough time elsewhere to become tax resident there, and the country in question comes after them for additional tax, then they're on their own and we will quite happily co-operate with the foreign country as necessary. It's not been a problem. Yet.

In reply to JuneBob:

In Croatia and Greece (there are maybe more countries) they have digital nomad visas.Pretty sure paying the local tax is obligatory.

In reply to VSisjustascramble:

It’s quite a bit more complicated than what you suggest.

In reply to Misha:

Which bit? Personal residency I’m no expert and I’m happy to be corrected, corporate residency is pretty simple.

In reply to JuneBob:

Bear in mind that it is very difficult to get the taxes right oneself, if one is filing tax returns in more than one country. One is generally protected from double taxation via DTA's (double taxation agreements), but the tax credits of the one authority against the other are very confusing - it's rather like a dog chasing it's tail! I file tax returns in the UK and US, and for the first few years after I retired, I tried filling in the forms myself, which ended up with me being investigated by HMRC, because I had made a minor mistake. Ever since then, I have paid accountants in both the US and UK to fill in the forms correctly, which is costly.

In reply to VSisjustascramble:

There is more to it than corporate residence. Permanent establishments for example. Payroll tax and VAT considerations as well. International tax is a complex subject. I can’t go into details due to my job but just wanted to flag that there is a lot more to it than you suggest. 

In reply to John Stainforth:

Hi, I am currently looking for a UK accountant who can understand a similar situation but for UK & Spain. If you can recommend someone I'd be very grateful (my old accountant 'sacked' me rather than deal with it!)

In reply to JuneBob:

The company I work for has recently set up payroll companies in Italy, Greece & Spain to ensure that it is appropriately paying people who are working remotely and are now nonresidents of the UK.

I'm sure they did this because it was the only appropriate way to employ people who were no longer UK resident for tax without accruing all sorts of liabilities.

In reply to anyone with a clue:

How should a UK entity go about paying workers who permanently live abroad?

In reply to Toerag:

I would recommend getting proper tax advice if you have that situation. There will be a number of fact specific aspects to consider across a range of different taxes.