Pay Part Onshore and the Rest Offshore

Split Payroll

Some organisations have been known to structure Income payments between ‘Onshore’ and ‘Offshore’ by running a spit payroll.

In such cases a basic salary is paid in the UK (normally around £12,000) and the rest of the money is directed overseas and paid to the individual subject to lower rates of tax.

This structuring is about tax evasion; the underlying fact remains that all the money concerned is remuneration for work done in the UK, and so is taxable in the UK; the splitting of the payroll does not alter the UK tax liability, although the scheme promoters may try to suggest otherwise.

Genuine ‘Offshore’ Work

If a person is tax resident in the UK then any income arising from offshore work is taxable in the UK. Therefore if a UK domiciled and tax resident individual went to work on a contract in Singapore for 3 months and received payment in the respective jurisdiction they would be required to detail this income on a UK tax return and pay any respective taxes on worldwide income (if there is a suitable ‘Double tax treaty’, credit may be given for tax paid ‘locally’ in the non-UK jurisdiction).

However, if a person is Not UK domiciled, or UK tax resident and they come to the UK on a temporary work visa and then take a contract in Singapore for 3 months then they may be paid onshore for any work undertaken in the UK and offshore for any work undertaken in Singapore. NB International tax and residence / domiciles issues are complex; you should not rely on this article in making any decisions; it is strongly advised that you take professional advice on your individual circumstances before proceeding with any actions.

Find out More

To find out more about Commonwealth Contractors call now on 0330 390 9021 or Submit your Details and we will get right back to you!

contact_us_tiny