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How does cross-border tax work for workers?

  • 2 min read
  • Last updated 7 Oct 2022

Not quite sure how cross-border tax works for workers? We admit it’s not the easiest subject to wrap your head around – so you’ll want to read our quick guide before accepting that job offer!

What is a cross-border worker?

Cross-border workers are people who regularly travel from one country to another to work. Cross-border workers are also sometimes referred to as frontier workers.

Example: Sara is a UK resident who travels via Eurostar to France for her work during the week, and heads back to the UK at the weekend. Just imagine living in the UK but working in Disneyland Paris! 🤯

What country do you pay tax in if you’re a cross-border worker?

Each country has its own rules when it comes to tax. Paying tax in two countries isn’t impossible, but it can be avoided if the country you are working in has a ‘double-taxation agreement’ with the UK.

  • The UK has a ‘double-taxation agreement’ with many countries
  • This agreement means cross-border workers can apply for full or partial tax relief
  • The official list of countries with this agreement is here
  • No double taxation agreement = you may have to pay double tax 😮‍💨

If there is a double-taxation agreement between a country and the UK, the country you pay tax in will be detailed in the individual agreement, and so will the country you claim tax relief in.

How do I pay tax in the UK as a cross-border worker?

The country you want to work in has a double-taxation agreement with the UK, woohoo! 🥳 But now you’re stuck wondering if HMRC will automatically tax your wages for you. Unfortunately, no. 

As a cross-border worker, declaring your foreign earnings is your ultimate responsibility, so you will have to submit a tax return to HMRC before the deadline. If you need any help doing this, TaxScouts is here to assist! 🙋

If the country you’re working in doesn’t have a double-taxation agreement with the UK, this still stands. You will need to submit a tax return to HMRC as well as find out how to pay tax in the country you work in.

Are cross-border workers eligible for tax credit?

Cross-border workers may be able to get tax credits as long as they’re regularly travelling from the UK to another country for work. How much tax credits you receive depends on your circumstances and the amount of hours you work per week.

If a cross-border worker travels to the EU, Switzerland, Norway, Iceland or Liechtenstein for work, they may be able to claim working tax credits

What documents do you need to become a cross-border worker?

If like Sara, you dream of swapping out the National Rail for the Eurostar, there’s a few things you should know beforehand:

  • You will probably need a visa or work permit to work in most countries
  • If you were working in another country before 1 January 2021, you may need a frontier permit to continue working abroad (another consequence of Brexit😅)
  • The rules are different for each country so be sure to check
  • The eurostar runs every thirty minutes 🚄

Feeling a bit stuck? 😖

If you’re a cross-border worker or considering working abroad, our accredited accountants offer specialist advice for just £119. Book a 45 minute consultation here.

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