Originally Posted by
Pontius Navigator
Pure speculation and conjecture. If you want the benefit of nonresidential status then it is a fair assumption that you are not 'overseas from UK' but resident there.
A valid comparison might be Loan Service Ts and Cs where you are paid and taxed (or not) by the State to which you are loaned.
The above assertion about Loan Service terms is incorrect. Loan service is paid for by the host nation directly to UK government. UK governemt then pays the individual in his normal JPA pay statement, usually adding Loan Service Pay and LOA. As LOA is an allowance it is not taxed, but all other income is, so loan service pay is taxed at the marginal rate-for most loanees 40%. The total take home is usually roughly equivalent to a normal at home salary without the tax. Incidentally the HN premiums paid to receive a loanee are about 3-4 times the amount that is paid to the individual and are independently negotiated to LOA rates, which seem to be cut year on year. So "in order to simplify the servicemans tax and National Insurance affairs, the serviceman is paid and taxed as if he was in the U.K. Throughout his service, irrespective of where he serves" so basically you pay about £2000 a month income tax and NI to avoid missing years towards your state pension... Many of the states we loan to have no local income tax so none would be due if taxes at local rates. A servicemans spouse accompanying him on loan may be considered resident abroad for tax purposes as indeed may the servicemen for income received outside the service, but his service income will always be taxed. Simple eh? And no it doesn't make sense or stand up to scrutiny but that is the situation. And not everyone serving overseas has access to tax-free car sales and the like, that depends on individual country MOUs. An American serving in exchange in the UK will be taxed while at home base but not whilst abroad on operations, and he will qualify for an official passport and tax free purchases. A UK serviceman serving in the US will not and will be taxed throughout by PAYE.
Now secondment (the devil is in the detail here) is different again...