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HMRC internal manual

Double Taxation Relief Manual

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HM Revenue & Customs
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Non-residents: UK income: Teachers: Claims to exemption

Residence before coming to the United Kingdom

Your first step is to identify the country which the teacher was a resident of immediately before coming to the United Kingdom. This tells you the agreement that you need to consult to see if it contains a Teacher Article.

There is no requirement that the teacher is a national of the agreement country. For example, a teacher who is a national of one of the former French colonies who has become resident in France will qualify for exemption under the French agreement, provided the other conditions in the Teachers Article are met.

Purpose of visit to the United Kingdom

Most agreements have a requirement that the visit must be for the purposes of teaching. If a teacher comes to the United Kingdom for some other purpose (e.g. to accompany a spouse or partner or to study) and subsequently takes up a teaching post, he or she should not be regarded as visiting the United Kingdom for the purposes of teaching.

Some agreements (e.g. Italy) also provided for exemption where the visit is to engage in research. Most of these agreements (but not all e.g. China) require that the research must be undertaken in the public interest before exemption is due.

Some agreements (e.g. Spain) require that the visit to the United Kingdom must be at the invitation of the university, college, school or educational institution. In such cases, the educational institution must have been involved in recruiting the teacher for the post before it can be said that this condition is met.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Where teaching is carried out in the United Kingdom

The teaching must be carried out at a university, college, school or other educational institution in the United Kingdom.

Length of visit to the United Kingdom

Normally the length of the visit must not exceed 2 years although in some agreements (e.g. China) the period is 3 years. Strictly, the teacher is not in a position to claim the exemption until his visit to the United Kingdom has ended. However, where the teacher states at the outset that the visit will not exceed the period specified in the agreement, you may provisionally accept that the exemption is due. In such cases, code NT should be issued to the payer of the teaching remuneration. See DT1937 where a teacher’s visit exceeds the time allowed under an agreement.

Where code NT is issued, the teacher must be warned in writing that if the visit extends beyond the period specified in the agreement tax will be payable on the teaching remuneration for the whole of the visit. There is an exception to this in that some agreements (e.g. Estonia) exempt the remuneration for 2 years even if the length of the visit exceeds that period.

Where a teacher visits the United Kingdom on 2 or more occasions you need to decide whether the visits may be treated as a single visit for the purposes of the exemption or whether they are separate visits.

  • If the interval between the departure from and return to the United Kingdom is 6 months or more the departure should be treated as marking the end of one visit and the return the start of a new visit.
  • If the interval between the departure from and return to the United Kingdom is less than 6 months you should take into account the teacher’s intentions at the start of the visit and any later departure from the United Kingdom. Where a teacher leaves with a fixed intention of returning, the earlier visit should be treated as continuing on that return. Where a teacher leaves with only a vague idea of returning, the earlier visit should be treated as having terminated.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Limitation by reference to time

Some agreements (e.g. the USA) provide that the exemption is only available for a period of 2 years from the start of the first visit to the United Kingdom for the purposes of teaching. In practice, the two year period should be calculated by excluding periods spent outside the United Kingdom between visits that can be regarded as separate visits (see above). For example, a teacher who comes to the United Kingdom from the USA on a one year contract on 1 September 2002, leaves on 31 August 2003, returns on a separate contract on 1 September 2004 and leaves permanently on 31 July 2005 should be regarded as satisfying this condition for both visits.

Where there are a series of 2 year visits only the first qualifies for the exemption (see CIR v Vas 68TC30).

‘Subject to tax’ rule

A few agreements (e.g. Finland) provide for exemption from United Kingdom tax of a visiting teacher’s remuneration only where that remuneration is subject to tax in the teacher’s home country. Where a teacher from one of those countries claims that the remuneration is subject to tax in the home country, you should ask for evidence in the form of a certificate or letter from that country’s tax authority.