Business Tax - 29 Oct 2018
Short Term Business Visitors (STBVs)
Employees of multinational companies are sometimes required to make short-term business trips between offices in different countries. This can lead to the double taxation of earnings and often, a requirement for employment taxes to be withheld in the relevant countries.
The UK’s double taxation treaties generally prevent double taxation; but this does not deal with the issue of withholding taxes known as PAYE. To ease the burden, where certain conditions are met, it is possible for an employer to obtain a Short-Term Business Visitor Agreement (STBV) whereby there is no requirement to withhold tax. However, the agreement gives limited assistance where an employee from an overseas branch of a UK company spends more than 30-days working in the UK during a year. Where this occurs, there is a requirement for PAYE to be withheld and that tax must be reported to HM Revenue & Customs by 19 April or 22 April following the end of the tax year on 5 April.
Following a consultation, two changes will be introduced to ease the burden of operating PAYE on Short Term Business Visitors to the UK from overseas branches.
Firstly, the UK workday rule will be increased from 30-days or less to 60-days or less. This will ensure that more overseas branches of UK companies will fall within the PAYE special arrangement and reduce the burden for employers to monitor or restrict business travel when an employee’s travel approaches the 30-workday limit.
Secondly, the existing PAYE reporting and payment deadlines of 19 April and 22 April will be changed to 31 May. This will allow employers more time to gather the information about their employee’s business travel and to calculate any PAYE due accurately.
Both changes will be introduced from 6 April 2020.
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In a Budget to signal the coming of the end of austerity Philip Hammond announced measures to increase public spending in particular to provide a boost to the NHS, Highway’s Agency and Counter Terrorism policing.
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