• Short Term Business Visitors

    Managing the compliance

Article:

Short Term Business Visitors – Managing the compliance

23 February 2022

In the pre-COVID years, the path of the Business Traveller was well-established, with short term commuter arrangements as well as ad-hoc business travel a regular occurrence. The closing of borders entirely or the quarantine restrictions that came with moving cross-border during Covid led to an inevitable slowdown of instances of business travel but some instances where individuals travelled cross border to work remotely.  Now that most restrictions from the pandemic have lifted, business travel is likely to return in some capacity as organisations determine the best approach to this area moving forward. After a couple of quiet years with little or no business travel, the compliance requirements will now need to be revisited and now is a great opportunity to build a robust process to manage business traveller compliance that can be scaled up should large scale business travel return in due course.

A re-cap of the issue in the UK

Short Term Business Visitor Agreement and annual reporting

Strict PAYE obligations exist for employers in the UK such that PAYE withholding is required in circumstances where an employee from an overseas parent, subsidiary or associated company visits the UK to work either for a planned project or on an ad-hoc basis.  There is no de-minimis limit for this and as such PAYE is due from the first day of work in the UK.

To assist with the administration in this area HMRC introduced the Short-Term Business Visitor Agreement to enable the PAYE obligation to be relaxed in situations where individuals coming to the UK originated from countries with which the UK had a Double Taxation Agreement and would therefore not be subject to UK tax. Organisations are required to execute an agreement with HMRC which requires annual reporting of business visitors in exchange for a relaxation of the PAYE obligation (by 31 May following the end of the tax year).

Ongoing tracking of Business Travellers is required to make the annual reports and to reduce the reconciliation exercise that can be needed at year-end should relevant information not be easily accessed.

Annual PAYE Scheme (Appendix 8)

The Short-Term Business Visitor Agreement only relaxes the PAYE requirements for individuals that meet the criteria of a relevant Double Taxation Agreement. It therefore does not cover non-resident employees employed by a foreign branch of a UK company, individuals coming from non-tax treaty countries or where the treaty conditions are not met (e.g. due to a costs recharge). In these circumstances, the only option for a Company is to operate PAYE. 

The Annual PAYE Scheme was introduced to combat the impracticality for employers of having to deal with employees that do not qualify for STBV treatment by allowing them to account for their visits to the UK for the whole tax year and operate PAYE at the tax year-end, with tax due and the associated RTI reporting to happen at month 12. This applies only to limited categories of visitors. 

It is necessary to make an application to operate a scheme, then to report, calculate and pay the appropriate tax by 31 May following the end of the tax year.

How can we help?

BDO’s Business Traveller service brings together the expertise of Global Employer Services specialists in over 160 countries to advise on employer and employee related obligations that arise due to short-term cross-border movement or remote working and assist with the completion of relevant compliance requirements as they arise. 

Backed by our BDO QuickTrip technology platform, we can provide a holistic solution to the ongoing tracking requirements of your cross-border employee population and the compliance risks that may result from their travel. 

Our service is based on flexibility and the needs of our clients, and as such we have several options to be considered when reviewing your Business Traveller requirements:

Short Term Business Visitor toolkit

Our one-stop self-service option enabling clients to review the requirements and provides access to all the material that is needed to make an application and annual reports.  Available from the BDO Store, the toolkit is an ideal option for those seeking to understand the scheme and to handle the relevant requirements themselves.

BDO assisted Business Traveller compliance reporting

Our Global Employer Services specialists can guide you through the process from review of your traveller population, to assessment of the requirements and eligibility for a STBV Agreement and the application and reporting as required.

Business Traveller advisory management

Our Global Employer Services specialists can work with your business to review your traveller population, review the ongoing tracking and management of compliance risks that arise from the movements of those employees, review internal traveller policies and how they address business attitude to risk, prepare relevant compliance reports and advise on payments where eligibility requirements are not met. 

Short Term Business Visitors reporting is just one of the deadlines that employers need to be aware of for 2022. Read our guidance on how to ensure you have accurate data ready in time to meet all the reporting deadlines: Employers’ Year End 2022.

 

Contact your local STBV specialist below or get in touch via our form

Ben Tarry -
Partner,
Midlands

 

Laura Burton -
Director,
Yorkshire

Adam Donald -
Associate Director,
Midlands

Tom Harrison
Senior Manager,
Midlands

Andrea Raper
Expat Tax Manager,
North West