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Short Term Business Visitors: payroll issues

Peter Goodman

06 June 2017

If you employ an international workforce, you may already be familiar with the challenges relating to taxation of individuals if they are normally based overseas, but visit the UK temporarily to work. Employers should be aware that HMRC has specialist PAYE teams which focus on inbound foreign nationals to the UK and expat issues – and failure to apply the PAYE rules properly can be expensive for employers.

Individuals who visit the UK temporarily are often referred to as Short Term Business Visitors (STBVs). These individuals are usually employed by an overseas entity of a group of companies and normally work outside the UK, but spend time in the UK on a temporary basis, to complete short term assignments, travel for business or have a multi-state commute which sees them working in a different country to which they live in.

What are the UK payroll rules for STBVs?

Employers generally need to add STBVs to their payroll and operate PAYE on all earnings from day 1. Another option is to enter into a STBV agreement with HMRC; known as a Short Term Business Visitors Agreement (STBVA). This is an agreement with HMRC to relax the rules and reduces risk on the employer.

However, there are several conditions that need to be met to ensure that employees are covered by this agreement. For example, they must be resident in a jurisdiction with which the UK has a double taxation agreement under which the ‘dependent personal services’ income from employment article applies. They should be coming to work 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; and expected to stay in the UK for 183 days or fewer in any 12 month period.

Where an STBVA is in place, there is an obligation placed on the employer to annually provide HMRC with certain information about STBVs. However, the information required by HMRC depends on the days that the STBVs spend in the UK. There are no reporting requirements in respects of STBVs spending up to 30 days, and limited reporting for those spending between 31 and 59 days working in the UK. For STBVs above 60 days there are additional reporting requirements.

Employers need to implement a reliable method to keep track of STBVs. This might include, not just responsibility of employees to report to a designated responsible person, but also for that person to have reports/access to travel information (flights in and out of the UK) and security logs. All UK days need to be tracked to include workdays, weekends and holidays. There are apps available which can assist in travel tracking and reporting.


If an employer has STBVs and has not entered into an arrangement with HMRC then it is recommended that they review their procedures and apply to HMRC to put one in place. Wilkins Kennedy can assist in providing advice on the preparation and submission of a STBV application to HMRC, and the implementation of a system to track STBVs to the UK.

For employers operating a STBVA, we can review and discuss the operation of the agreement and provide your staff with guidance and recommendations to implement going forward. This can be done in conjunction with a full PAYE/benefits review.

If there is a concern that issues relating to the tax of STBVs might not have been addressed in the past, then we can undertake a review to identify the potential PAYE exposure. Where required we can advise and prepare a voluntary disclosure to HMRC and help in keeping penalties to a minimum.

About Peter Goodman

Peter Goodman

Peter joined Wilkins Kennedy in 1986 and was made a Partner of the firm the following year. As a private client tax specialist, Peter has in depth experience in tax efficient structuring and tax planning for families, in addition to having specialist knowledge of the international tax arena, particularly for expats and non-domiciled executives moving to or from the UK. He has an in-depth knowledge of tax investigations, estate planning, capital taxes and trusts.

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