According to a research carried out by an international recruiter, 77% of all UK contractors are willing to work abroad. As one of the top reasons they cited the higher take-home pay. Another reason is the better work-life balance and almost 44% simply wanted to experience working and living abroad.
Although for some of these guys the higher salaries and tax benefits are really tempting to relocate, for others leaving family and friends behind is not an easy job.
Most of the contractors complain of the labyrinthine UK tax system. Under the new rules over the residency, the contractors will need to safeguard themselves against paying income tax on their overseas earnings by ensuring their contracts cover the entire year.
There are also other ways to ensure that foreign earnings are exempt from UK tax but they are so complex that contractors risk falling foul of them.
It’s different for the contractors paying little or no tax working abroad. If the UK Tax office (HMRC) forces them to still pay UK income tax, this will undermine one of the biggest advantage of working abroad.
Working abroad for most of the tax year means contractors will not pay UK income tax if they return to the UK only for short breaks.
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