Short-term business visitors to the UK – “A host of PAYE obligations”.
When UK employers host short term business visitors (STBV) from abroad, they will 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 no UK income tax may actually be due.
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 investigate 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 have they been included in a formal STBV agreement (known as an Appendix 4 agreement or STBV agreement), HMRC are likely to start asking searching questions.
Example
A UK company undertakes a client project in the UK and arranges for its Czech subsidiary to assign three of its employees to work on the project for 2 months.
The Czech employees remain on the Czech payroll, but the Czech company charges the employees’ salary costs back to the UK company.
It is likely that the UK company will be required to operate PAYE on these STBV earnings. However, depending on the precise number of days the employees spend in the UK and various other factors, a PAYE relaxation may be available if an STBV agreement is obtained by the UK company.
Our services
Tracking STBV and technology tools:
Assist employers in developing both their STBV policies and processes, and their tracking methodologies.
Integrating Forvis Mazars’ app-based technology tool Track Global into policies and processes, enabling employers to:
Track business travellers who submit travel requests in a secure app-based portal
Comply with tax and immigration regulations in real time
Produce risk assessments
Build country-by-country risk reports
Forecast future compliance risks and take action to mitigate them
Immigration
Advise employers on their UK visa/work permit requirements for STBV.
Tax
Apply for STBV agreements, determine which STBV can be included in the agreement, seek clearance from HMRC on contentious cases and prepare year-end reports.
Social security
Obtain the necessary agreements from UK and overseas authorities to effectively manage the payroll withholding.
Corporate tax issues
Offer employers consultation on transfer pricing and permanent establishment risks associated with STBV.
Get in touch
If you need support with any of the above, please get in touch with the team.
