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If I earn income working abroad and it goes into a bank account not in the UK - say for example I was teaching english, would it be liable for uk tax? If the money went into a UK bank account would that be a different matter?

  • I work in Afganhistan for NATO and get paid tax free I go back to uk 10 weeks out of the 12mths but now my contract has come to an end after almost 3yrs will I have to pay tax back I am a uk residence and English – user22776 Nov 30 '14 at 14:14
  • @user22776 doesn't NATO have one of those special tax deals like the UN agencies do – Pepone Nov 30 '14 at 18:40
  • I have a friend who worked in Afganistan as a teacher. He earnt an extraordinary amount of money. – Andrew Welch Nov 30 '14 at 18:49
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It makes no difference (to the UK) what country a bank account is in. What matters is whether you are resident in the UK or not while employed locally in a foreign country. You're taxed on where you are tax resident (which could be either country, both, or neither), not where the money is earned or banked. You can assume, with modern exchange of information agreements, that all money you put in bank accounts anywhere in the world will eventually be known to the UK authorities.

The rules for when you are a UK tax resident changed recently, there is now a statutory test for residence (pdf). The rules are complex, but in general if you are outside the UK for less than one full tax year you're still resident, and in many cases where you're gone longer than that you may still be, depending on the length of your trips back to the UK and the ties you have there.

So a 6-month winter job in Thailand teaching English as a foreign language will be subject to UK tax if you come back after, even if you leave all the money there or in a third country. If you pay local tax as well there are agreements between countries to avoid double taxation, but these do vary. What you do about National Insurance payments while gone for a short time is another complex area.

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With a question like this you should talk to a tax professional who knows about international tax and knows about both the UK and the country you will be working in. They will give you up to date advice on what can be an extremely complex question. However to get you started I'll tell you what I was told when I did this nearly twenty years ago.

It's all about whether you are resident in the UK for tax purposes or not. If you are, you will pay UK tax. If not, you wont (assuming you are being paid outside the UK - check with your professional exactly what is involved). In those days you could be counted as 'non resident' if you spent a complete period of twelve months outside the UK. You can make occasional visits to the UK without invalidating that. Again, check exactly how much you are allowed to return while still being not resident.

Usually you will have to pay tax in the country where you are resident, but check the rules there. With some skilful timing you may be able to be considered non-resident in bouth countries, at least for some of the time. Again, your tax professional will know.

The bank account question - again get a professional. I don't think it's a problem, but you may have to establish that you are being paid in the foreign country. In general you are going to need an account in the country where you work, so if its a problem get paid there and transfer any money you need in the UK.

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