Here is the first Tax advice e-mail I had recieved.
Your tax obligations are determined by your tax residence status, your employment status and the UK:Belgian double tax treaty.
Because you have not left the UK for a continuous contract of employment (or self employment) lasting a period that covers a complete tax year UK HMRC will not initially regard you as UK non-resident. This is significant in that, if you are non-resident, your earnings from work undertaken overseas would not be taxed in the UK but only in the country where the work is performed.
If you secure continuation contracts that cause you to work for X beyond 5 April 2008 there is a strong probability that HMRC would retrospectively accept a N/R claim and it is possible that they would also accept the concessional split year basis to apply this from 4 September 2006.
If your earnings are not liable to UK tax they will be liable to Belgian tax being the territory where the services were performed.
However at present this is not clear. Your employment with XX, in the last tax year 2006/07, was for less than 183 days and your direct employment with X in the current tax year is also contracted for less than 183 days. Under the terms of the Double Tax Treaty the employment income of a non-resident worker is only taxable in the country where the duties are undertaken where the contract exceeds 183 days. Therefore at present you would seem to be still subject to UK tax with a revision of that status dependent on future events.
A further complication is your employment status. Clearly I am not aware of all the relevant factors relating to your contract: we may need to explore this further? However , from the terms of the contract, despite the title of 'consultant', I consider that your contract is essentially one of short term employment. And that would normally impose an obligation on the 'employer' to deduct tax and social payments.
We could supply details to the UK HMRC and seek a ruling ( which we might then accept or appeal). However I would advise that we consider your employment status a little further and also consider the likelihood of your securing an extension of your contract - which under the DTT would then give primary taxing rights to Belgium. In short I think it better to wait and see which jurisdiction applies rather than start down one course and then face conflicting demands from another tax body: I am sure that you can imagine the possible bureaucratic nightmares!
Your tax obligations are determined by your tax residence status, your employment status and the UK:Belgian double tax treaty.
Because you have not left the UK for a continuous contract of employment (or self employment) lasting a period that covers a complete tax year UK HMRC will not initially regard you as UK non-resident. This is significant in that, if you are non-resident, your earnings from work undertaken overseas would not be taxed in the UK but only in the country where the work is performed.
If you secure continuation contracts that cause you to work for X beyond 5 April 2008 there is a strong probability that HMRC would retrospectively accept a N/R claim and it is possible that they would also accept the concessional split year basis to apply this from 4 September 2006.
If your earnings are not liable to UK tax they will be liable to Belgian tax being the territory where the services were performed.
However at present this is not clear. Your employment with XX, in the last tax year 2006/07, was for less than 183 days and your direct employment with X in the current tax year is also contracted for less than 183 days. Under the terms of the Double Tax Treaty the employment income of a non-resident worker is only taxable in the country where the duties are undertaken where the contract exceeds 183 days. Therefore at present you would seem to be still subject to UK tax with a revision of that status dependent on future events.
A further complication is your employment status. Clearly I am not aware of all the relevant factors relating to your contract: we may need to explore this further? However , from the terms of the contract, despite the title of 'consultant', I consider that your contract is essentially one of short term employment. And that would normally impose an obligation on the 'employer' to deduct tax and social payments.
We could supply details to the UK HMRC and seek a ruling ( which we might then accept or appeal). However I would advise that we consider your employment status a little further and also consider the likelihood of your securing an extension of your contract - which under the DTT would then give primary taxing rights to Belgium. In short I think it better to wait and see which jurisdiction applies rather than start down one course and then face conflicting demands from another tax body: I am sure that you can imagine the possible bureaucratic nightmares!
I hope you are not offering if the answer is no 
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