25 April 2023
UK businesses with global operations often have overseas employees who visit the UK for short business trips. As travel restrictions on a global basis have continued to be relaxed and global business travel recommences, UK companies receiving such visitors should consider whether there may be income tax and National Insurance Contributions (NIC) obligations under PAYE in respect of such employees from the first day of their visit to the UK, no matter how short the trip is.
For tax purposes, a potential way of managing this potential PAYE requirement is to enter a Short-Term Business Visitors Arrangement (STBVA) also called an Appendix 4, with HMRC. The STBVA can remove the need for the UK businesses to deduct tax under PAYE where certain conditions are met. There are still tracking and reporting obligations, but much less onerous than applying payroll, and can be done via a post-tax year corporate reporting. The STBVA does not cover NIC, however, and so NIC will always need to be considered separately. The STBVA only applies to countries with which the UK has a Double Tax Agreement.
The Appendix 8 agreement can be reached with HMRC to allow reporting and payroll for visitors from non-treaty countries (including Brazil whilst we await the newly signed treaty to be ratified) or visitors employed by an overseas branch of a UK company, for up to 60 UK workdays.
If you have entered a STBVA for the 2022/23 tax year ordinarily you are required to submit your report to HMRC by 31 May 2023.
It is important to note that there is still an obligation to review data and submit a report to HMRC, even if this is a nil report.
Appendix 4 or 8 may also be used to capture reporting obligations for global remote workers in the UK, depending on the facts and circumstances.
If you have any further questions about short-term business visitors to the UK, or global business visitor technology solutions, please contact Joanne Webber or Ainsley Wainwright.