Taxation, Social Security and Pension
This section highlights the taxation, social security and pension implications of working abroad - for the individual and the University.
If an individual works abroad temporarily, they may be required to report their earnings from the University (and other income) to the tax authorities in the overseas country and to also pay personal tax on these earnings. Depending on the individual’s residence status, and the country in which they are/have been working, they may end up paying more in tax than if the individual had spent the whole of the tax year in the UK. This is a very complex area and country specific so it is important to understand this in advance of working abroad. The individual is responsible for their personal tax position.
For the University, the individual’s presence in an overseas location for work purposes could mean that it would have to pay corporate tax in that country. It may have to create a ‘Permanent Establishment’ for tax purposes in the overseas location. We may also have to set up and run a payroll in that country to ensure tax is withheld from the individual and paid over to authorities. This could lead to significant additional cost for the University, both in terms of additional taxes and in ensuring we comply with our reporting obligations in that country.
The individual may also have to pay into the overseas country’s social security (also known as National Insurance) scheme. This is an incredibly important consideration as social security contributions – in most countries – provide access to healthcare and other benefits provided by the state, e.g. pensions. More information about working abroad and the impact on national insurance is available at:
To facilitate some working abroad arrangements the University may have to register in the overseas country to ensure social security payments are made. This is a very complex and expensive process for the University.
It is important to know that a decision to carry out work from abroad may affect an individual's continued membership of a UK-approved pension arrangement, and in some cases both the individual's contributions and the University’s would need to cease. It is therefore very important to check the individual's position prior to undertaking any work abroad.
More information about how working abroad can affect membership is available at the University’s two main pension schemes:
If you still have questions, or if there is a particular issue you would like more detail on, please contact the Pensions Department: