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Hypothetical - Self Employed Tax Question


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I'm curious to know what, if any, systems/procedures are in place to ensure that foreign self-employed consultants/contractors pay UK tax or indeed tax in their own country.

Specifically..... had a chat with someone who is from overseas (outside the EU). He has right to work here. Has been offered short term specialist job by large-ish company (is actually a a US company with offices worldwide) here in the UK. Nature of the work means he does not have to be physically present on the company officess site in person (i.e can work remotely/from home/etc). Has arranged to be paid GROSS (which I gather is standard for contractors/consultants whether UK based or not) - and paid directly to his foreign bank account.

Question(s): If such a person wanted to, could they deliberately avoid paying ANY taxes IF they so chose to? (obviously at some risk somewhere)

For the duration of the job said consultant would not be resident in his home country (and would likely be able to prove that) - and so would not be eligible for earnings in his home country whilst aaway from home.

Technically he should be paying UK taxes? For any period that work is performed here in the UK?

BUT....even if the UK and said other country have bilateral tax or banking agreements or other such treaties, just how efficient would HMRC be in chasing up such people - after their work was done and they had left the UK?

Given the size of the company would such a person be 'lost' in the vast company finances and only be picked up on via random checks? OR do UK companies (or companies operating in the UK) have to notify HMRC of even people for whome they do not pay National Insurance and Income Tax?

Although the chap didnt say it explicitly, there was an insinuation the UK systems was a 'soft touch' and IF he wanted to, the risk of non-yaing and being caught was slim.

My understanding, from talking in the past to friends/acquaintances who are self-employed, is that UK self employed have to ususally show the employing company some sort of certificate/documentation showing their company details, etc. But a foreigner?

The general question is topical I believe in the context of the other mildly related debated surrounding the rise in foreign labour in the UK.

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The rule is one of residency..

But simply it is this.

ANY income made in the UK by anybody should have UK income tax applied to it, ANY resident or not.

If you are ordinarily or resident you have UK income tax applied to your UK income AND your world wide income.

So yes the person should be paying UK taxes, but it relies on HIM telling HMRC.... which is not in his interest.

Though really if he pays his taxes back home HMRC usually gives double tax relief anyway.

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