When does the clock start ticking? Tax issues insurers must consider for short term business visitors

As more businesses in the insurance sector become increasingly global, so more employers are moving their staff between their international offices. Rather than making use of long-term secondments, organisations may prefer to send staff overseas on shorter business trips.

However, when they do, employers often under-estimate the employment tax requirements.

There is a common misconception that no PAYE is due unless an employee has spent more than 183 days in the UK. In fact, HMRC’s stance is that employers will have an obligation to add such employees to their UK payroll and pay PAYE from the first day that they are working in the UK. Non-compliance could expose the UK employer to the risk of interest and penalties, or lead to an HMRC compliance review.

However, the strict PAYE rules may be relaxed where the UK employer enters into a ‘short term business visitor’ (STBV) agreement with HMRC – formally called an ‘EP Appendix 4 arrangement’.

Conditions for PAYE exemption

Individuals for whom the following applies may be not subject to UK taxation and, if a STBV agreement is entered into with HMRC, no PAYE may be due if the individual is:

• 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 equivalent) is likely to be competent;
• coming to work in the UK for a UK company or the UK branch of an overseas company; and
• expected to stay in the UK for 183 days or less in the period referred to in the treaty (12 month period or fiscal year).


Part of the STBV agreement with HMRC is an obligation to file annual reports detailing the number of STBVs arriving in the UK each year. The extent of detail that the UK employer needs to provide to HMRC depends on the number of days that the STBVs spend in the UK in a tax year.

60 day rule

Employees resident in a double taxation agreement country who remain on the foreign payroll may be treated as employed by a foreign employer where they are present in the UK for a period of less than 60 days, and that period does not form part of a more substantial period of presence in the UK. In such cases, treaty relief may apply if the other conditions for it are met. The rule also applies where the employee’s remuneration costs are borne by a UK branch or permanent establishment of a foreign employer. The rule does not apply where the employee’s presence in the tax year is for less than 60 days but it is part of an actual or anticipated longer period of 60 days or more, which need not be continuous and must take into account past visits and expected future return visits to the UK.

NT coding option

While the STBV approach is useful for larger employers, there is an alternative route available which may be attractive to companies that only receive one or two short-term visitors a year. Instead of seeking a formal STBV agreement with HMRC, the UK employer can apply to HMRC for a ‘no tax’ or NT tax coding. This would enable the visiting employee to be included on the payroll, but no tax deducted. The application for the NT coding would typically mirror the information required under the STBV arrangement, but PAYE should be operated until the code is received.

UK Social security

National insurance contributions (NIC) will not be due, provided the employee meets the conditions of a relevant social security agreement and the employer applies for a certificate of coverage/A1. HMRC has indicated that they would expect visitors/assignees to the UK to be in possession of a valid certificate where the duration of the visit/assignment will be in excess of six weeks. UK social security will also generally not be due where there is no social security agreement, provided the employee is considered not ordinarily resident in the UK, remains employed by an employer outside the UK and is not in the UK for a continuous period of 52 weeks or more.

UK individual income tax return compliance

Usually, where the criteria for the concessionary PAYE treatment are satisfied, there will not be a requirement for the individual to file a UK tax return unless he or she has received UK source income which is not protected by the Double Taxation Treaty.

Key challenges tracking your STBV

Identify & track

• Educate and communicate with the key stakeholders in the business and employees.
• Implement HR policy for STBVs, including benefits, employee support and responsibilities.
• Introduce a robust tracking process.


• Identify useful employee data (e.g. travel records and expenses).
• Provide employees with tax briefings and calendars.
• Complete a periodic review of data to identify possible tax and payroll risks.


• The company provides support in the filing of employee reports in home and host locations.
• Complete and file employer payroll and STBV obligations.

Recent developments

HMRC has announced a new simplified annual PAYE system for employees who spend less than 30 days working in the UK during the tax year, but don’t fall in the scope of the STBV agreement (e.g. they are not from a country that has a DTA with the UK).
Even so, the rules affecting STBVs are more complex than many employers assume. If in any doubt about how to achieve compliance, contact our Employer Consulting Group for assistance.

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