The internationalisation of the Higher Education sector continues to accelerate, driven by strategic imperatives to diversify revenue streams through non-UK student recruitment, global teaching initiatives, and access to international research funding. Furthermore, as institutions seek to enhance their research profiles and global rankings, the recruitment of leading academics who live outside the UK has become increasingly common; along with an increasing number of employees moving and working across borders to resource research work or partnering with academics in other countries. All scenarios which result in UK employees in seats in overseas universities and/or extended business travel.
These developments are reshaping workforce models across UK universities. The growing reliance on cross-border academic talent and international collaborations has led to a rise in complex international employment scenarios, the implications of which must be carefully considered from an employment regulation and tax perspective.The implications of an international employment landscape for Higher Education providers
UK universities with international employees must navigate a multifaceted landscape involving:
- labour law compliance across jurisdictions
- payroll reporting and social security obligations
- permanent establishment risks for corporate tax purposes
- immigration and Right to Work checks
- data protection and GDPR compliance.
The post-COVID employment landscape means that many institutions have cross-border remote working taking place in the business. These can range from add-on days or weeks to overseas holidays right or commuting arrangements into the UK (the employee lives in another country but commutes to deliver face to face teaching in the UK). However, each of these scenarios has individual risks to consider around labour law, benefits provision, payroll reporting, social security and even permanent establishment risk (for corporate taxes).
Face-to-face or even virtual teaching to non-UK markets often requires a set-up of international entities and there are a host of local country specific regulatory and business compliance matters to consider before entering these arrangements. These range from entity compliance in areas like sales, payroll and corporate taxes as well as registrations for employments and business activity.
Universities with international employees, business travel and/or international operations (actual or planned) should check they are following local requirements and make financial provisions as appropriate.
Immigration continues to be both a key business requirement in the sector but also a key compliance risk (especially considering the overall political climate of recent years). Compliance with Right to Work checks and correct work permits for any non-UK based employees should be regarded as a priority. In addition, as the location of the workforce internationalises, care should be taken to ensure that personal data and documentation that is held by universities as employers is adequately protected to meet the requirements of GDPR as it moves across borders.
A note on UK employment tax
Universities are often employers of a significant number of people and large remitters of PAYE and National Insurance. We’re seeing a trend of more payroll audit activity with additional compliance related recruitment now turning into tangible activity. Long standing risk areas such as Off Payroll workers / contractors remain in HMRC focus.
Additionally, new rules around payrolling of benefits in kind are proposed to go live 6 April 2027. Depending on how you structure your payroll, this may require a significant change to your payroll and benefits processes as well as requiring careful review from an employee change impact perspective.
How we can help
Crowe’s Workforce Advisory team offers strategic and operational support, which can help universities manage the complexities of an international workforce.
- Global Mobility: Expert guidance on cross-border employment tax, social security, and compliance risks, including shadow payrolls and permanent establishment considerations.
- Employment Tax Advisory: Support with PAYE, National Insurance, and upcoming changes such as the mandatory payrolling of benefits-in-kind from April 2027.
- HR Advisory: Assistance with workforce planning, compliance audits, and navigating employment law across jurisdictions.
- Incentives and Rewards: Tailored solutions for incentivising academic and research talent, aligned with institutional goals.
Our multi-disciplinary approach ensures universities can proactively manage risk, optimise workforce strategies, and remain compliant in an increasingly globalised and regulated environment.
If you would like support and advice tailored to the needs of your organisation, please reach out to your usual Crowe contact.
