Tax update: Brexit and working overseas

Published: Monday 5 July 2021

With the Coronavirus pandemic leading to more people working remotely, thoughts may be turning towards moving your ‘virtual office’ to sunnier climates for the summer holidays. However, it is not as straightforward as just booking a flight and packing your bags!

Post Brexit, if you are travelling to a European country and intending to work whilst there, you will need to consider whether a work and/or residence permit is now required as well as any potential tax implications of doing so.

The default position is that UK workers no longer have an implicit right to live and work in an EU country. Each country will now have its own set of rules on what is required when travelling to work in their jurisdiction.

For example, a UK resident individual decides to work remotely in Switzerland for the six weeks of summer holidays. Although it is not an EU country, Brexit has still resulted in a change of rules for UK individuals which may now make it illegal to work in Switzerland without first obtaining a work permit.

There is an exception, however, for posted UK employees (workers sent by UK companies for short-term visits) for less than 90 days who will still be treated as Europeans. This exception is expected to remain in place until at least the end of 2022 and UK employers will need to use the existing online notification tool for such engagements.

Similarly, in the Netherlands a work permit is now required for any period of time. Further, for stays of more than 90 days a combined residence and work permit will be required.

There is some good news, however, with travel to Ireland which continues to allow for free movement for work and travel, under the Common Travel Area agreement.

Once permits have been agreed, the taxation implications of working overseas also need to considered. Although payroll-tax specific rules have not changed significantly post-Brexit, the rules for National Insurance/social security do need to be carefully considered. For further details, read our previous article on this subject here.

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