UK Short Term Business Visitors (STBV): guidance to stay compliant..
When it comes to short term business visitors (STBVs) to the UK, confusion can arise on whether or not there are any tax liabilities or reporting requirements to fulfil even for just short business trips.
Often people may have heard of the 183 days threshold and therefore assume (wrongly) that double tax treaty (DTT) relief will always apply automatically to a short term business visitor too.
Unfortunately, in the UK the rules are slightly more complicated and often companies find themselves caught off-guard when it comes to the reporting and compliance for STBVs.
The table below aims to provide some form of clarity in as a succinct way as possible.
However, it is worth bearing in mind that the information provided below is non-exhaustive and that there are different short terms business visitor requirements depending on the country an individual is from and whether or not they are a company Director.
It is important to note that for short term business visitor purposes, a “day” in the UK is considered any part of a day in the UK for business or pleasure.
Guidance matrix for compliance short term business visitors to the UK
STBV in the UK
30 days
51 - 59 days
60 - 90 days
91 - 150 days
151 - 183 days
183+ days
UK entity = economic employer
No PAYE
No PAYE
PAYE from Day 1
PAYE from Day 1
PAYE from Day 1
PAYE from Day 1
UK tax return
No
No
Yes
Yes
Yes
Yes
UK entity is NOT the economic employer
No PAYE if STBV exemption rules apply AND Appendix 4 obtained
No PAYE if STBV exemption rules apply AND Appendix 4 obtained
No PAYE if STBV exemption rules apply AND Appendix 4 obtained
No PAYE if STBV exemption rules apply AND Appendix 4 obtained
No PAYE if STBV exemption rules apply AND Appendix 4 obtained
PAYE from Day 1
One time Appendix 4 application to HMRC for exemption from STBV payroll rules*
UK tax return
No
No
No
No
No
Yes
Company annual reporting requirements
No reporting
No reporting provided:
1. employee remains on home country payroll.
2. no formal contract with the UK entity
3. visit is not part of longer spell in the UK
Submit individual report to HMRC.
Report to include details such as name, address, duties, country in which tax return is filed declaring worldwide income and confirmation that the UK company has not borne costs.
Employee remains on home country payroll.
Same info as for visitors up to 90 days + copy of overseas tax residence certificate, details of nationality, place of birth.
In addition, confirmation individual has not spent 183+ days in any tax year, or more than 364 days in the past 5 tax years, in the UK.
HMRC ought to be informed as soon as it is known individual will be in the UK for 150+ days.
In addition to info for STBVs up to 150 days, individual also needs to show, at the year end, certificate of continuing residency from their home country.
Not applicable
Short term business visitors rules and conditions
*In order to successfully apply for an Appendix 4 to HMRC and to obtain the short term business visitor exemption from operating a UK payroll, the following conditions ought to be met:
This arrangement must only be applied where individuals are:
Resident in a country with which the UK has a Double Taxation Agreement under which the Dependent Personal Services / Income from Employment Article (Article 15 or the equivalent) is likely to be competent
Coming to work in the UK for a UK company or the UK branch of an overseas company, or are
Legally employed by a UK resident employer, but economically employed by a separate non resident entity
Expected to stay in the UK for 183 days or less in any twelve month period
Moreover, in order to successfully apply for an Appendix 4, HMRC will usually want to be satisfied that:
– companies will have a system in place to accurately track and record employees visits to the UK for business trips;
– employees will periodically report details of their UK visits to the company and in particular they do not spend more than 30 days intermittently in the UK in a 12-month period without reporting it to their employer.
Additionally, the Appendix 4 short term business visitor agreement (STBVA) is denied to employees visiting for work from overseas branches of a UK entity.
The 60-day rule
At a high level, the 60-day rule means that a cross charge to a UK entity, which, per the applicable DTT, would normally deny tax relief to the STBV, is not conclusive, if the period of work in the UK is 60 days or less.
In order to be eligible for this rule, employees need to be on an overseas payroll and the 60 days (or less) must not form part of a more substantial period.
Should the conditions for payroll exemption no longer be met after Appendix 4 has been successfully applied for, HMRC ought to be notified without undue delay to ensure payroll regularization and to avoid potential penalties.
FAQ on STBV
What happens if the foreign company has no entity in the UK?
If the foreign employer has no entity in the UK and there is no other UK host employer, then there is no UK entity which can be deemed to be the economic employer (see definition in the OECD’s commentaries to Article 15 section 8.14) of the individual and therefore no UK payroll is required.
Are there any alternatives to applying for Appendix 4?
If the sending company has only one or two employees affected, they may want to apply to HMRC for an NT code for the individual/s instead.
Furthermore, if the Appendix 4 conditions cannot be met, for instance because the STBV is from a country with which the UK has no DTT, a special arrangement exists that allows companies to apply for Appendix 8 instead.
Appendix 8 however, only applies to any STBVs who work in the UK for 60 days or less during the UK tax year.
Any other factors to consider for short term business visitors?
Attention should also be paid to the activities carried out by the individual/s in the UK in order to avoid inadvertently triggering a de factoPermanent Establishment of the foreign entity and thus exposing it to UK corporate taxation.
Finally, companies and employees should be aware of the social security contributions implications when visiting the UK even for short business trips only lasting less than 30 days.
Given the complexities around STBV rules, it is recommendable to engage the expertise of a niche expat tax and global mobility specialist to advise on the best approach to follow for the individual circumstances of each short term business visitor.
Contact us should you require further clarifications on STBV reporting requirements and on how to stay compliant. We offer a free ½ hour consultation.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.