UK/Portugal DTA Article 15 (Employments) salary taxable abroad - tax/reporting in the UK?

I am a British citizen who moved to Portugal permanently last year. I am a resident in Portugal, employed by a Portuguese company, paid salary in Portugal to my EU bank account. I pay income tax and social security contributions in Portugal. I rent a flat and live in Portugal. I am not employed by any UK entity and have no UK-originating income. I would like to confirm my understanding of UK/Portugal DTC, Article 15, Employments (... salaries, wages and other similar remuneration ... derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State). If, according to the UK SRT, I also become a tax resident in the UK, but spend less than 183 days in the fiscal year concerned: 1. Will the UK also tax my salary derived from my employment in Portugal? 2. Will the UK also tax my salary, if, while physically present in the UK, I work via internet for the Portuguese employer? 3. Would I need to report my worldwide income, including that from Portugal to HMRC? 4. Indeed, would I need to send tax returns to HMRC? My presence in the UK would not be related to my employment in Portugal, and I would not conduct any business-related activities requiring my physical presence in the UK, e.g. no business meetings, no site visits, no time spent at any office in the UK. Many thanks in advance.

Hi PF,
If spending less than 183 days in the UK you would not be considered UK tax resident and you would only declare your income in Portugal.
If you stay more than the 183 days and are classed UK resident, you would be liable on your worldwide income.
Credit would be given for any tax paid in Portugal to reduce your UK liability.
Thank you. 

Hi @HMRC Admin 25, Thank you for your reply. Could you please clarify why I would not be considered a UK tax resident if I spend less than 183 days in the UK? Isn't it possible to become a tax resident according to the SRT, for example, spending 121 days in the UK, being a resident in the previous three tax years, and having one more tie? Would a girlfriend in the UK be considered as a family tie? Would a rented flat in the UK be considered as an accommodation tie? The rest remains the same as in the first message in this thread—no employment in the UK, employed and taxed in Portugal, spending less than 183 days in the UK in a tax year. Kind regards, PF

Hello, I have a similar question to the original message in this thread. I am a British (and Portuguese) citizen who moved to Portugal in March 2023. From the time of my move to Portugal in March 2023 to May 2024, I continued to earn an employment income from a UK-based employer who has no physical presence or permanent establishment in Portugal. My employment income was paid into an offshore bank account. During the relevant period, the vast majority of my time was spent on gardening leave and based on the advice of my UK accountant, I should consider myself non-UK tax resident pursuant to the various UK tax residency tests (e.g., more than 183 days spent outside of the UK, only 12 days spent in the UK, no "ties" to the UK, etc.). Throughout this period, I have continued to pay UK income taxes and NI contributions on my UK employment income. Given that the majority of this time, I was on gardening leave or holiday, there was no exercise of employment in the UK territory, and throughout this period I was in Portugal where my family resides and we have our family home. On my UK 2022-23 tax submission, I submitted notice to HMRC that I had moved outside the UK effective March 2023. The advice of my Portuguese tax accountant is that I should be paying employment income taxes in Portugal (and not the UK). My UK accountant has not been able to appropriately advise and has suggested engaging tax counsel to opine (which seems very expensive for what should arguably be a straight forward assessment). Based on these circumstances: 1. Under the terms of Art. 15 of the Portugal-UK DTA, where should I be paying my employment income taxes? The wording in Para 2 of Art. 15 of the Portugal-UK DTA is not entirely clear. 2. If the answer is "Portugal", should I seek a refund from HMRC in relation to employment income taxes paid in the UK? If so, which form would you recommend using? I would be grateful for your advice. With kind regards, Threadneedles, KC.

Hi,
You will pay tax in the country you are tax resident. to make a claim, the form will be - Double Taxation: Treaty Relief (Form DT-Individual)
Thank you.

Hello, Thank you for your prompt reply. I had a couple of clarifying questions: 1. The form "Double Taxation: Treaty Relief (Form DT-Individual)" that you suggested completing states it is applicable for "relief from UK Income Tax on pensions, purchased annuities, interest or royalties arising in the UK". Should this form also be used for relief from UK Income Tax on employment income? 2. As a practical matter, if the amount of tax owed in Portugal is less than the amount already paid in the UK, will HMRC (assuming it accepts the application): (i) refund the full amount of UK income tax already paid?; or (ii) refund only the difference between what was paid in the UK and what is owed in Portugal?. Thank you again for your help. With many thanks, Threadneedles, KC.

Hi Threadneedles KC,
Here is our response to:
1. No - if still employed on UK payroll, you need the P85  
2. If now resident in Portugal, HMRC would refund the tax from the date you left , where applicable.
Thank you.