Treaty rights and working for a foreign firm as consultant

[albechan]

Hi guys.
I'm trying to figure out a very important aspect on what exercising Treaty rights in the UK includes.
I am Italian and will move soon to London because of my Japanese wife's job.
I obviously have no problem to legally reside there but in order to get the RC for my wife I need to prove that I am exercising Treaty rights in the UK.
I have a job for an Italian company that I don't want to leave and that I can perform well even if I'm staying in London as long as I keep traveling from the UK to Italy. I am a consultant and my physical presence is often not required. This Italian company has basically no business ties with the UK.
If I keep working for them and receiving payslips from this company, although it's not based in the UK and has no relevance to their economy, do you think that I can still be considered as exercising Treaty rights in the UK?
Otherwise the only option I have left is to appear as a self-sufficient person.
Thank you so much!

[fysicus]

In principle this is possible: you can live in one country and work in another. It is a popular setup in the Netherlands for example, where someone can move just across the border to Germany or Belgium (to have their foreign partner benefit from directive 2004/38) and commute from there on a daily basis to their job in Holland.

Now, obviously UK and Italy are not within a reasonable commuting distance and do not have a common border, so it will become more tricky. It is also unclear where you would have to pay income tax. I'm not an expert in such matters, but it seems to me that a few things need to be sorted out properly in advance.

[albechan]

In principle this is possible: you can live in one country and work in another. It is a popular setup in the Netherlands for example, where someone can move just across the border to Germany or Belgium (to have their foreign partner benefit from directive 2004/38) and commute from there on a daily basis to their job in Holland.

Now, obviously UK and Italy are not within a reasonable commuting distance and do not have a common border, so it will become more tricky. It is also unclear where you would have to pay income tax. I'm not an expert in such matters, but it seems to me that a few things need to be sorted out properly in advance.

Thanks for your reply, Fysiscus. I think I should pay taxes in Italy for the simple reason that it's where the source of my income is based. I need to confirm it, though.
Do you think it'd be easier to apply for my wife's RC stating I'm a self-sufficient person?
Thanks

[fysicus]

Yes, the self-sufficient option is always available. However, in that case you need to show that you have health insurance cover in the UK.
You probably have some Italian health insurance now, and an (italy-issued) EHIC to prove it, but this normally only covers you for the odd trip abroad (i.e. outside Italy). If you will be in UK most of the time, you probably need a health insurance policy from a UK provider. Again, an issue on which I am not really an expert but certainly one that needs to be sorted out to prevent very unpleasant surprises.

Also: check if there is a tax treaty between UK and Italy. If so, that should define which country can collect taxes from you. And don't expect the rules to be logical or even understandable...

[Jambo]

I think I should pay taxes in Italy for the simple reason that it's where the source of my income is based. I need to confirm it, though.

The UK authorities might disagree with you - see Income Tax when arriving in the UK. This is a complex issue which depends on your status in the UK, the number of days you live in the UK and some other factors. I suggest you seek professional advice here.

Please note that in order to be considered resident in the UK from the EEA immigration preservative, you need to reside in the UK for at least 6 months a year to keep your residency (and your wife eligibility to live in the UK). However, for tax purposes, being a resident for at least 6 months a year might mean that you need to pay UK tax....

[albechan]

Thank you very much. I grow more and more convinced that the best option for me is to exercise Treaty rights as a self-sufficient person.
I will seek professional advice on the tax issue and decide accordingly.
You guys have been very helpful, thank you so much!