We often see situations where an individual from outside the UK is sent on a work assignment in the UK, and the need for the assignee to be put on a UK payroll is missed. Just because the employee remains employed by their home country employer, and is being paid in their home country, it doesn’t mean that there are no payroll obligations in the UK. Many assignees working in the UK are fully taxable from day 1.
If your assignees are tax-equalised then you would want to consider putting them on a modified payroll, which is specifically for tax-equalised expatriates and involves tax being paid to HMRC on a monthly basis but using an estimate of the total tax which will be due for the year (subject to a reconciliation at year end).
Even if employees would be eligible to only pay tax in their home country, according to an applicable double tax treaty, they may still need to be put on a UK payroll because tax treaties don’t apply to payroll requirements! HMRC acknowledges that this creates extra work for both the company and the tax authority which is pointless as the tax will only end up being refunded, and so it is possible to enter into an agreement with HMRC whereby qualifying individuals can be excluded from payroll in exchange for a report after tax year end, detailing who has been excluded. There is also a relatively new arrangement that allows employers to include certain employees from countries without a tax treaty with the UK, under certain circumstances.
Global Eyes Tax Services can help you secure an agreement with HMRC to make your payroll compliance simpler where short term business visitors are concerned. We can also help with advice on modified payroll operation. For help, Contact Us.