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Posted Tue, 05 Mar 2024 07:45:01 GMT by sedgey
I'm a UK passport holder that has been non-resident for around 18 years residing in Japan. I'm currently running in to an issue where companies are reluctant to interview as they do not know the PAYE, TAX and National insurance implications of hiring a remote employee. I would like to know if they would have any obligations, as I have been and continue to be non resident and if so what would they be. Also, if I were to work on a contract basis as a supplier of services, would the same rules apply? I currently complete a TAX return in Japan as a self employed individual and as far as I'm aware a double tax agreement exists between the UK and Japan. However, I wonder if hiring me would be handled as if an overseas branch of their company had been opened in Japan? Lastly would there be any national insurance or tax obligations for myself as a UK national (non-resident) working for a UK remotely as permanent employee? Thank you very much in advance for your assistance.
Posted Wed, 06 Mar 2024 02:27:54 GMT by sedgey
Dear HMRC Team, From what I can tell having read through various documents on your site, since I'm non resident and have been for some time, provided I work remotely and do not spend time working in the UK office. Then it should be the case that there are no TAX/PAYE obligations for the UK company? And that I would continue to complete a tax return here in Japan and also pay into the pension system and medical insurance system here in Japan? This would seem to be the case if I were a contractor or an employee of the company. Since I would be working for a team based in the UK office, there should be no ambiguity about the company having offices in Japan. If you could perhaps confirm that I would greatly appreciate it. Thank you very much in advance.
Posted Wed, 06 Mar 2024 15:21:22 GMT by HMRC Admin 25
Hi sedgey,
If you are a non UK resident, who commences employment from a UK employer, they would set you up on their payroll system as normal and send the 'FPS' information as normal.
They would deduct tax from your income as normal.
 You would in turn, submit the online form P85 once you have commenced the employment; to confirm that you are resident outside of the UK, but employed by a UK employer.
HMRC can then send the correct tax code to your UK employer instructing them to stop deducting tax and refund any tax already you have already paid, back to you.
You would declare this income in Japan as foreign employment income.
If you will be working for a UK client as self employed individual, they would pay you gross, per your invoices and this is declared gross in Japan as foreign self employment income.
You would not be subject to UK national insurance, although you can voluntarily pay towards a state pension.
Apply to pay voluntary National Insurance contributions when abroad (CF83)
Thank you. 
Posted Wed, 06 Mar 2024 16:08:11 GMT by sedgey
Thanks very much for the comprehensive response, much appreciated!
Posted Thu, 07 Mar 2024 10:39:43 GMT by HMRC Admin 5
Hi sedgey

Please refer to guidance at Tax on your UK income if you live abroad

Thank you

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