There are many reasons why people decide to go and work abroad; students on a gap year, summer holiday work, considering a permanent move, or it may be that your current employer has asked you to go overseas for a short or long period. This guide aims to help you understand when and where you can work, your employment rights and also the implications for you financially in terms of paying tax abroad.
Working abroad - what to consider
For the vast majority of people going abroad, it is a short-term decision. Students often work during their summer break, or individuals take a gap year to experience the world. For many, this work will be in bars, restaurants and clubs and is fairly easy to come by. For those with a transferable qualification, such as skiing, sailing or competent crew certificates, they can get instructing seasonal work around the world.
This may not be an exhaustive list, but before going to work abroad, you should consider the following:
1. What permits do you need for you and your family - do you need work permits, residency permits or visas for the country you are going to?
2. What is the cost of living in the country you will be working in - the salary being offered needs to meet your expected expenses AND
3. Will your salary meet any costs you may have to keep in the UK?
4. Are there promotion chances abroad comparable to that of staying in the UK?
5. How will you be paid? - if you are paid in the currency of the country you are working, but into a UK bank account, you will be charged a conversion rate! Can they pay you in sterling, or should you open a bank account in the country of work? Banks like Lloyds TSB offer International Bank accounts which may help - click on the advert on the right for more information on accounts for people working and living overseas.
6. If you are transferring abroad with your current employer, what support schemes are in place for your family, or if you decide to return to the UK? 7. Are there arrangements for accommodation when you first arrive?
8. If this is to be a permanent move, will you be allowed time off to return to the UK for any formal arrangements to be finalised; selling your home, closing bank accounts for example?
9. If the job ends, what are the chances of finding another job in that country; can you stay on the permit you have; can you return home easily?
There may be many more questions to ask yourself, but these should be high on your list.
Where you can work, and your rights
As a member of the European Economic Area you have the right to work in any other member country without the need of a work permit. However, you need to remember that your employment rights will be governed by the country in which you work, and NOT the UK. This will also affect your working conditions, minimum pay and holiday entitlements (including public holidays). If you are a member of a Trade Union, they should still be able to help in these matters, but would still be governed by the laws of the land. Even if you are being transferred by your company, you will not necessarily have the same working conditions or rights as you currently do, and so it is important to hammer the detail out before you accept the posting.
There are restrictions in other countries, and you should research your destination carefully through their embassy webpages. The USA, Canada, Australia and New Zealand all have working holiday visa provisions for UK citizens. In developing countries, there is normally only paid work if you have a TEFL (teaching English as a Foreign Language) qualification.
Your qualifications may not necessarily be recognised in other countries, even in other European states. Some professions even have employment restrictions, so don't assume that your good qualifications will make it easy to find a job.
Paying Tax on income from paid work abroad
We all know that Tax is a complicated matter, and you should contact your local tax office if you are planning on going to work abroad, for their help and advice. In general though, a person who is resident in the UK (whether you are currently living in the UK or not) is normally taxed on their income on an 'arising basis'. This means that they will pay UK tax on all of their income as it arises and on their gains as they accrue, wherever that income and those gains are in the world.
When you are paid in the foreign country you are working, you might find that your income has been taxed at the rate for that country, however, that DOES NOT mean the income is not taxable in the UK. You should declare the income and any deductions made and in many cases, relief will be given for the foreign tax already paid.