Addressing reporting requirements for short-term business visitors to the UK

26 July 2024

When UK employers host short-term business visitors (STBV) from abroad, they often create tax, social security and immigration compliance obligations for the business, even though the employees may spend relatively little time in the UK and UK PAYE income tax may not be payable on their earnings.

Due to the global nature of Financial Services, UK employers in this sector often host non-UK resident employees legally employed by an overseas entity in the same corporate group. For example, a Chief Risk Officer visiting their team in the UK, a head of department with a global role ensuring group methodology is applied in the UK, or a trader visiting a client in the UK etc.

In these situations, employers need to:

Track and record these employees to ensure that they meet their PAYE and other regulatory compliance obligations connected to their UK duties.
Seek assistance on how to meet these obligations.

HMRC are increasingly focusing on this area, and failure to meet the strict employer reporting requirements in this area may lead to interest and penalty charges. HMRC may also use this as the reason to inquire into other aspects of the company’s tax compliance and make changes to the risk profile of the business with HMRC.

Additionally, HMRC and The Home Office share visa records with each other. Therefore, if STBV earnings have not been subject to PAYE tax withholdings, nor been included in an Appendix 4 STBV agreement, HMRC are likely to start asking searching questions.

Case study

A UK subsidiary of an overseas headquartered bank hosted non-UK resident employees employed by its non-UK parent company at their London office.

Some of the employees were resident in a country with which the UK did not have a double taxation agreement (DTA) until recently. This meant that their earnings related to their UK work days before the DTA was in place fell within the scope of UK PAYE income tax, and there was a PAYE failure.

Additionally, the UK subsidiary did not have an Appendix 4 STBV agreement in place.

We worked with the Bank to regularise their PAYE compliance obligations in respect of its STBV by:

Making a disclosure with HMRC to limit the tax years to be covered and mitigate penalties.
Obtaining an Appendix 4 agreement.
Putting in place a policy and process to identify and report STBV in real time, using our technology tracking tool Track Global to implement the policy and produce risk assessments to identify tax, social security and immigration risks for STBV on a proactive basis.

Assisting the Company in making its year end STBV reports to HMRC.

Get in touch

Financial services employers need to manage overseas trips by their employees for business travel to ensure PAYE compliance.

Failure to manage these reporting requirements could lead to penalties and reputational loss, together with the associated costs involved to regularise the position.

By taking proactive action to track and report STBV, employers can mitigate these risks.