Home working from abroad

Home working has resulted in much talk of “cabin fever” and increasingly we are hearing of remote working abroad.

But while the process of employees swapping their UK-based home office for a more exotic location may seem straightforward, there are multiple considerations for both workers and employers. A number of City banks have reportedly warned high-paid executives spending the pandemic at second homes in warmer climates, that they could face large tax bills if they don’t return to working remotely in the UK.

There are many jobs that can be done remotely and that means it doesn’t have to be UK based. An employer needs to consider the type of work performed and whether they actually need to demand an immediate return, especially if the workplace is closed. What is important is that employees should keep their employer updated on what they are doing or they may be in breach of their employment contract.

However different countries have different rules when it comes to tax and if an individual ends up working in a different country for a period of time, that country may decide that they should pay tax there. In some countries that could mean paying tax on all income even if tax is also being paid in the home country.

Working visas also need to be considered. When the Brexit transition period ends this will be less straightforward. The flexibility of the employer to recall employees to the workplace for any reason will be severely restricted because of the amount of time it would take for the employee to travel back to the UK; that’s if, at that point, travel is even permitted by the authorities. Time differences between countries could also cause issues for those who continue working.

Employers who opt for asking employees to come back to the UK even if there is no work to offer them should tread carefully, however. Any rules they placed on travel during lockdown should be considered but, if there is no actual requirement for the employee to be physically in the country, then doubt would be cast over whether it was a reasonable request. Where employees can work from home (albeit abroad), it would be wise to allow that and keep it under review. Long periods of several months abroad may have tax implications. Where an employee can’t work from home/abroad, the employer may consider periods of leave and/or request the employee returns to the UK and follows the required quarantine rules.