A dual contract is an arrangement where an employee has two employment contracts with different employers (usually in the same group), covering the whole of their working time.
Dual contracts don’t just apply to straightforward employments. The rules can also affect situations where, for example, there is a combination of UK and offshore employments and or memberships of limited partnerships or limited liability partnerships exist.
Employees who are resident in the UK are subject to UK income tax on their worldwide income. However, if they are non-UK domiciled they are not subject to UK tax on income for wholly non-UK duties with a non-UK employer unless that income is remitted to the UK.
From 6 April 2014, additional conditions must be met to qualify for the remittance basis.
HMRC’s specialist team is now leading tax investigations into all known cases of dual contracts, using the self assessment powers available to it, as well as various international information exchange agreements, the number of which is ever increasing.