Global remote working could hit UK tax take

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ovid-19 has seen thousands of UK-based workers leave the country for at least part of the lockdown period, Blick Rothenberg experts have reported. They continue to work overseas, which means many will become liable to tax and social security payments in the countries where they live.

This means HMRC will have to refund UK taxes and potentially National Insurance charges that have been paid in the UK because the individuals’ core tax and social security rights are held to be in the other location.

Alternatively, HMRC may need to provide tax credit relief in the UK for the taxes that have been legitimately paid in overseas jurisdictions where UK-based employees are now living – for example, if someone remains UK resident but is held to also be taxable in another overseas country at the same time, because of the amount of time they have spent abroad.

These issues will produce significant falls in personal tax and NIC receipts for the 2021-22 and 2022-23 UK tax years. More worryingly, the success of home working in the past 18 months may result in a permanent loss of revenue to HMRC as increasing numbers of highly skilled UK employees chose to relocate to holiday homes abroad and other locations.