Introduction
Many multinational organisations assume that local teams can manage international assignments autonomously, and that HQ oversight is only needed for complex moves. While decentralisation offers agility, it can obscure material compliance and operational risks.
Heads of Tax, CFOs, and HR leaders should understand where these gaps appear — because the consequences can include audit exposure, unexpected payroll corrections, and reputational damage.
1. Common Assumptions Employers Make About International Assignments
- Local managers know the rules and will escalate exceptions.
- Short-term or low-value moves don’t require central review.
- Policies are “flexible” to encourage operational efficiency.
Why This Feels Safe
- Country teams often have local experience.
- Assignment volumes are low per region.
- HQ resources are limited, creating a culture of trust.
2. Why It’s Risky When It Comes to Cross-Border Assignees
Fragmented Oversight Leads to Errors
Nobody with overall oversight may easily lead to:
- Missing approvals for visa or work permits.
- Payroll miscalculations between home and host entity.
- Inconsistent documentation of assignment purpose or benefits.
Exposure Accumulates Quickly
Even small deviations can compound:
- Multiple short-term extensions may trigger tax or PE obligations.
- Local employment contracts may inadvertently bind the company to host-country obligations.
- Uncoordinated benefits create audit red flags.
OECD research on global mobility of internationally mobile employees.
3. How the Issue Typically Surfaces
Post-Year Review or Audit
- Misalignments are often discovered during year-end payroll reconciliations.
- External audits reveal missing approvals or documentation gaps.
Operational Signs of Poorly Set-Up International Assignments
- Employees ask multiple managers for approval of bespoke set-ups
- HR and Payroll disagree on allowances.
- Unexpected tax adjustments or penalties occur.
International Assignments – Case Scenario
A US-headquartered company allowed its regional office to approve short-term UK assignments without carrying out due diligence. Over 12 months:
- 7 international assignments exceeded 90 days
- UK Short-Term Visitors (STBV) rules and potential payroll requirements were not considered (i.e. no Appendix 4 application filed with HMRC)
- The local office failed to document visits (a key requirement under STBV rules), track extensions, or assess whether the activities performed required a UK work permit or payroll/tax reporting.
Everyone simply assumed: < 6 months = no UK work permit, payroll or taxes.
- No Certificate of Coverage applied in the US to prevent UK National Insurance Contributions from being due.
Outcome: Company faced audit questions from both UKVI and HMRC.
Was it worth it?
For the UKVI audit, the company had to pay an UK Immigration specialist firm to help them defend their position. They were eventually able to demonstrate all worked carried out in the UK was within the permitted activities without a work permit (but they still incurred significant professional fees to address the matter).
For the HMRC audit, not only the company had to incur the same significant professional fees. In the end, HMRC also imposed retroactive payroll corrections (since no Appendix 4 or Certificate of Coverage had been applied for which would have prevented the need to operate a UK payroll) plus interest and penalties.
It is worth mentioning that the company was also involved is some fairly uncomfortable conversations with HMRC about the “economic employer” concept and related PE triggers (though in the end, HMRC did you pursue this particular aspect further thanks to the professional tax experts and litigators the company had engaged).
All of the above would have been preventable through proportionate central oversight and a forward-looking, risk-prevention approach to international assignments and short-term business travel.
4. What Earlier Intervention Looks Like
- Implement a central due diligence and review point for all assignments and short-term business trips no matter how short in duration.
- Standardise data collection across regions.
- Ensure cross-functional visibility: HR, Payroll, Tax.
- Maintain a single source of truth for assignment policies.
Central oversight does not require bureaucracy — but it does require visibility, accountability, and consistency.
