Individuals who are moving to the UK on a temporary basis can significantly reduce their liability to UK tax by making the most of this tax planning strategy.
A tax saving is usually available for individuals who are assigned to the UK by an overseas employer for a period of up to two years.
HM Revenue allows relief from income tax for travel and subsistence payments if they are incurred in the performance of employment duties. This is generally known as “detached duty” or “temporary workplace” relief.
To qualify for this relief from income tax an individual must be working away from their normal location for a maximum period of 24 months.
This will typically apply to an employee who is seconded to the UK for a fixed-term assignment, not to individuals who move to the country to take up a new UK employment: there must be an existing relationship with a home country employer.
Individuals who qualify for the relief can claim certain expenses:
- The extra cost of travel to the temporary workplace
- The reasonable cost of accommodation (furnished or unfurnished)
- Daily subsistence costs
These expenses must relate to the seconded employee, and not to the employee’s family.
The tax savings can be significant – but it is important to ensure the employee is eligible.
If you are relocating to the UK with an employer outside the UK we invite you to contact your nearest GM Tax office – or complete the enquiry form on this page – to explore what might be possible.