HMRC is consulting on possible changes to the current ‘EP appendix 4’ PAYE arrangements, under which UK employers need not operate PAYE for employees of their overseas subsidiaries on short stays in the UK. This easement does not currently apply to visits to the UK by employees from overseas branches of UK companies. The consultation proposes two broad options, involving either: extending the UK workday rules; or introducing a new tax exemption for short-term visitors.
At Spring Statement 2018, the government announced its intention to consult on these arrangements, ‘to simplify the tax treatment of short-term business visitors from the foreign branch of a UK company, to ensure the UK is an attractive location to headquarter a business’.
A PAYE easement is available to UK companies with short-term business visitors arriving from their overseas subsidiaries, as set out in HMRC’s PAYE manual at PAYE 82000. The UK company can apply to relax their obligation to operate PAYE on the relevant earnings of an individual who is:
tax resident in a country with which the UK holds a double taxation agreement;
coming to the UK to work for a UK company for less than 183 days in any 12 month period; and
economically employed by a non-resident entity.
There is no equivalent easement for UK companies with short-term visitors arriving from an overseas branch. This means that a UK company with visitors from an overseas branch will incur costs and administrative burdens that a UK company with visitors arriving from an overseas subsidiary may not.
Under a special PAYE arrangement introduced in 2015 and set out in HMRC’s PAYE manual at PAYE 81950, UK employers may be relieved of real-time PAYE obligations for qualifying business visitors with 30 or fewer UK workdays in the tax year.
HMRC is considering two broad options for changes to the rules:
extending the PAYE special arrangement UK workday rule from 30 to 60 days; or
introducing a new tax exemption for short-term business visitors from overseas branches.
HMRC is consulting on possible changes to the current ‘EP appendix 4’ PAYE arrangements, under which UK employers need not operate PAYE for employees of their overseas subsidiaries on short stays in the UK. This easement does not currently apply to visits to the UK by employees from overseas branches of UK companies. The consultation proposes two broad options, involving either: extending the UK workday rules; or introducing a new tax exemption for short-term visitors.
At Spring Statement 2018, the government announced its intention to consult on these arrangements, ‘to simplify the tax treatment of short-term business visitors from the foreign branch of a UK company, to ensure the UK is an attractive location to headquarter a business’.
A PAYE easement is available to UK companies with short-term business visitors arriving from their overseas subsidiaries, as set out in HMRC’s PAYE manual at PAYE 82000. The UK company can apply to relax their obligation to operate PAYE on the relevant earnings of an individual who is:
tax resident in a country with which the UK holds a double taxation agreement;
coming to the UK to work for a UK company for less than 183 days in any 12 month period; and
economically employed by a non-resident entity.
There is no equivalent easement for UK companies with short-term visitors arriving from an overseas branch. This means that a UK company with visitors from an overseas branch will incur costs and administrative burdens that a UK company with visitors arriving from an overseas subsidiary may not.
Under a special PAYE arrangement introduced in 2015 and set out in HMRC’s PAYE manual at PAYE 81950, UK employers may be relieved of real-time PAYE obligations for qualifying business visitors with 30 or fewer UK workdays in the tax year.
HMRC is considering two broad options for changes to the rules:
extending the PAYE special arrangement UK workday rule from 30 to 60 days; or
introducing a new tax exemption for short-term business visitors from overseas branches.
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