Risks for International Organisations

International organisations that have employees visiting the UK for short periods of time (anything from one day to 183 days per tax year) are affected by the issue of short term business visitors. Failure to take appropriate action to monitor short term business visitors may lead to unexpected tax exposures and penalties.

Payroll Compliance

Strictly speaking, Pay As You Earn (“PAYE”) must be operated on the earnings of all individuals working in the UK from Day 1. The concern is that in the UK, the company who is using the services of the overseas employee must operate PAYE as if it were the employer. This is the case regardless of whether the employee is paid by the UK company, the overseas company or partly by both and whether the individual is ultimately exempt from UK tax under a double tax treaty.

Where treaty exemption applies and certain conditions are met, the PAYE obligation can be relaxed by entering into a Short Term Business Agreement (STBVA) with the UK tax authorities.

The reporting requirements under the STBVA depend on the number of days the individual spends in the UK.

If you believe this may be relevant to you then please get in touch.