How Short Term Business Visitor Reporting works

Strict PAYE obligations exist for employers in the UK.

When an employee from an overseas parent, subsidiary or associated company visits the UK to work for a planned project or on an ad-hoc basis, PAYE withholding is required. There is no de-minimis limit for this, so PAYE is due from their first day of work in the UK.

Short-Term Business Visitor Agreements enable your business’ PAYE obligations to be relaxed in certain situations where those coming to the UK originated from countries with which the UK has a Double Taxation Agreement, and so would not be subject to UK tax.

Businesses must have an agreement in place with HMRC that requires annual reporting of business visitors by 31 May following the end of the tax year, in exchange for a relaxation of the PAYE obligation.

You will need to track your business visitors to obtain the agreement from HMRC, make the annual reports, and reduce the complex reconciliation exercise at the end of the tax year. A key component of ensuring that your business is not at risk of reputational harm is to have a responsible tax strategy that includes controls around the compliance risks posed by your business visitors. A growing number of businesses are implementing traveller-tracking technology to demonstrate a robust approach in this area.

Do you need a Short Term Business Visitor Agreement?

Top tips for completing your Short Term Business Visitor reporting

  1. Review the origin country of your visitors Remember that only visitors coming from a country with which the UK has a Double Taxation Agreement in force with a competent Dependent Personal Services/Employment Income article can be included in your reporting.
  2. Understand the purpose of the visits The STBV Agreement is for individuals who travel to the UK to work for the benefit of a UK company. As such, depending on the activity undertaken, not all of your visitors will need to be reported.
  3. Consider the quality of your data How are your visitors tracked? How confident are you that your available data sources pick up all travel into the UK? Do you need a technological solution to evidence a robust approach to tracking?
  4. Be aware of branch structures and recharges STBV agreements do not cover non-resident employees employed by a foreign branch of a UK company or third party foreign employer vehicles such as Employer of Record, and you should take care in any situation where costs are recharged to a UK company. This may disqualify the relief, unless the employee’s visits total fewer than 60 days during the tax year, and do not form part of a longer period of 60 days or more.
  5. Beware Non-Resident Directors Statutory Directors of a UK company who are performing UK board duties whilst in the UK are not covered by the STBV Agreement. More analysis is required to determine the appropriate PAYE obligation in relation to such individuals – getting expert advice is suggested.
  6. It's not just about Tax Business travellers also need careful management from an immigration perspective, in particular given recent rule changes in relation to the Electronic Travel Authorisation for non-visa nationals.

Annual PAYE Scheme (Appendix 8)

STBV Agreements only relax the PAYE requirements for individuals who meet the criteria of a relevant Double Taxation Agreement. They do not cover non-resident employees employed by a foreign branch of a UK company or third party foreign employer vehicles such as Employer of Record, 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 business is to operate PAYE.

The Annual PAYE Scheme allows employers to account for the reporting payroll information for certain individuals that do not meet the criteria of the STBV Agreement once a year, rather than monthly. The Annual PAYE Scheme means that the payroll information for the whole tax year is processed at month 12, with any PAYE due settled at the month 12 payment date. Annual PAYE Schemes apply only to visitors that spend no more than 60 workdays in the UK in any given tax year.

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