IR20 - Residents and non-residents liability to tax in the United ...

This guidance does not apply from 6 April 2009. The guidance it contains is replaced by the
guidance provided in HMRC6 – Residence, Domicile and the Remittance Basis. It is kept
available for those people who need to make reference to IR20 for their tax affairs before
5 April 2009.
Incidental duties
5.7 Whether duties you perform in the UK are ‘incidental’ to your overseas duties
(paragraph 5.5) depends on all the circumstances. If the work you do in the UK is of the
same kind as, or of similar importance to, the work that you do abroad, it will not be
merely incidental unless it can be shown to be ancillary or subordinate to that work. It is
normally the nature of the duties performed in the UK rather than the amount of time
spent on them that is important, but if the total time you spend working in the UK is
more than 91 days in a year, the work will not be treated as incidental. Examples of
duties which we do not normally regard as incidental are
• attendance at directors’ meetings in the UK by a director of the company who
normally works abroad
• visits to the UK as a member of the crew of a ship or aircraft
• visits to the UK in the course of work by a courier.
5.8 If the work you do in the UK has no importance in itself, but simply enables you to do
your normal work abroad, it may be treated as incidental. We will decide after looking at
all the circumstances in your case. Examples of duties which we regard as incidental
are
• visits to the UK by an overseas representative of a UK employer to report to the
employer or to receive fresh instructions
• training in the UK by an overseas employee as long as
- the total time spent in the UK for training is not more than 91 days in a year,
and
- no productive work is done in the UK in that time.
Earned income arising outside the UK
5.9 In the case of earnings from employment, the table at 5.19 sets out the tax position. If
you are resident in the UK, we will normally tax you on all earnings you receive from
sources abroad. In certain circumstances, however, you may be entitled to a deduction
of 100% on certain earnings from an employment performed wholly or partly overseas,
if you are resident (and ordinarily resident) in the UK but spend a sufficient number of
days abroad (see paragraph 5.10).
For all years up to and including the year ended 5 April 2008, the default position is that
you will be taxed on the earnings from your overseas employment on the remittance
basis (see also paragraph 5.12) if you are
• resident but not ordinarily resident in the UK, or
• resident and ordinarily resident but not domiciled in the UK - but only in the case
of ‘foreign emoluments’ where the duties of the employment are performed wholly
outside the UK (see footnote 1 to the table at 5.19).
For tax years from 6 April 2008, although the qualifying criteria for the remittance basis
have not changed, it is no longer mandatory in respect of earnings from overseas
employment; instead, most individuals who wish to be taxed on the remittance basis are
required to make a claim for it (see paragraph 5.12). In some circumstances there are
certain exceptions from this general requirement to make a claim (see paragraph 5.12a)
IR20 20
HMRC 03/09