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Remote Working – waiting for tax law to catch up

Do you work remotely? We live in a global technological world. Many people now have jobs which can be done anywhere they have their laptop and an internet connection. Companies are taking advantage of this to increase remote workers to save office costs and increase efficiency.

It all works well – until the remote worker choses to work in a different country:

  • Maybe their partner or spouse moves to a new job in Germany and they take their remote work with them.
  • Maybe they have a holiday home in France and just decide to spend a lot more time there.
  • Maybe they work remotely for the UK Government and are living in the MiddleEast but return to the UK with the kids for two months in the Summer staying with grandparemts and avoiding the heat.

International tax law – in the UK and in most other countries  – makes employment income taxable in the country where you do the work – certainly once you pass a minimum number of days. So suddenly the employee and their employer are plunged into getting advice and paying tax and social security in a different country.

Not a popular move for UK employers if employees move within the EU where Employer social Security contributions can be double or triple compared to UK rates.

The three examples above are all real life cases. In each case the initial response was – how will anyone ever know? My employer doesn’t care where I work. Within Europe there are no visas or work permits. It is all too complicated. And it is.

So now we have to wait for tax law to catch up with life.

I’m interested in other examples of tax problems with remote workers so please let me know if you have come across this  problem too.