Individuals who are moving to the UK on a temporary basis can significantly reduce their UK tax liability by utilising detached duty relief (also known as ‘temporary workplace’ relief).
To qualify for the detached duty relief, as well as the maximum 24-month time period, an individual will also need to have an existing relationship with an employer in their home country, reinforcing the temporary nature of their employment in the UK – which is why detached duty relief typically applies to an employee who is seconded to the UK for a fixed-term assignment, rather than individuals who move to the country to take up a new UK employment.
In this situation, HMRC will allow relief from income tax for travel and subsistence payments if they are incurred in the performance of an individual’s duties of the employment – commonly known as ‘detached duty’ or ‘temporary workplace’ relief.
Savings and claims under Detached Duty Relief
For those who qualify, the potential savings are significant. Under detached duty relief, an individual can claim expenses for:
- the cost of travelling from home (or anywhere) to their temporary place of work
- the reasonable cost of accommodation – including all utilities – near to their temporary place of work
- daily subsistence costs, to cover the cost of meals.
It’s important to remember that these expenses relate to the individual employee only, and not their family. It should also be noted that these rules are quite complex, and the correct documentation and proof of payment will be needed to substantiate any claims. But by seeking early advice and applying the rules correctly, overseas staff can benefit from a significant tax planning opportunity.
If you are relocating to the UK with an employer outside of the UK, we invite you to contact FKGB Accounting Limited to explore the possibility of detached duty relief.
