Business people meeting

Short-term Business Visitors: Risks and Opportunities

Dinesh Jangra, Partner, Global Practice Leader for Global Mobility
Business people meeting
Dinesh Jangra identifies the risks relating to STBVs, and the different ways companies can manage them.

As businesses work increasingly ‘cross-border’, so do the people who work for them. STBVs are employees who are employed, pay-rolled or live in one location, but also work in another.

Defining short-term business visitors

STBVs include:

  • directors and non-executive directors who live in another country
  • anybody travelling between countries to work
  • employees who are based in one location for payroll, but work regularly in other countries
  • workers who live and work from home in a country different to their country of employment and/or payroll.
  • secondees or assignees, usually part of some formal programme or framework (although this is not always the case).

STBVs may also be contractors, who can be regarded as employees in the UK, despite how they are categorised overseas.

  • Related news: Consultation: Off-payroll working in the private sector.

The risks of short-term business visitors

STBVs can give rise to immigration and employment law issues, as well as tax complications. Employers should ask themselves:

  • do the employees have the right work visas and permissions to be working in the UK?
  • across Europe, are employees working in the EU subject to posted worker directives?
  • are the employees gaining rights under local labour law as a result of being present and/or working in another country? What would that mean on termination?

Taxation can be complicated when it comes to:

  • payroll
  • social security
  • income tax filings for the employees
  • permanent establishments under corporate tax rules.

If these risk are not managed, the repercussions can be costly and disruptive.

  • Payroll non-compliance can result in backdated payroll taxes and interest, and penalties.
  • Employees being refused permission to enter a country can cause business disruption.
  • Employees being able to bring action under the labour laws of two countries can result in difficult, costly terminations.

Travel risk management


Employers have to know who is traveling, and why. Information from diaries and timesheet systems can be used. There are also services that enable direct tracking of employees through GPS phone applications; a number of accountancy, immigration and relocation firms now offer this service.


Once an employer has information on who is traveling, they need to review if compliance is being triggered. This usually involves the application of immigration, income tax, permanent establishment and social security rules to the travel data. This analysis could create a post-travel risk report, which shows what has happened, and what may happen in future, if data is extrapolated. Some systems offer a pre-travel assessment which stops the travel process while flagged compliance actions are addressed.

Compliance actions

These may include:

  • work permit applications
  • reporting to tax authorities
  • adding employees to payroll
  • applications for social security certificates of coverage and tax filings and returns.
  • managing employee presence in a country to prevent compliance obligations arising.

There is no one size fits all. The correct approach will depend on an organisation’s:

  • size and scale
  • available budget
  • approach to risk
  • travel data ecosystem and internal expertise.

UK technical considerations

There are a number of UK technical issues and reporting easements for pay-as-you-earn (PAYE), and the National Insurance contribution/social security, which need to be considered. Questions employers should ask include:

Has Payroll / PAYE been triggered?

If the employer doesn’t have a presence in the UK and there is no host UK employer, then in theory no PAYE is due. However, this does not mean the employee is not taxable in the UK – the employee may need to file UK tax returns under self-assessment.

What is the payroll starting position?

In theory where an employee is working in the UK, PAYE should apply from the employee’s first day of work. This causes administrative difficulties like:

  • collecting earnings information on different payrolls each month
  • handling real time information (RTI) can also result in double taxation and dual payroll obligations on the same income.


HMRC offer two easements (A special PAYE arrangement and Appendix 4 STBVA agreement) to the starting position, which apply on application; they can’t be used unless an employer is specifically approved by HMRC. Easements do not apply to directors of a UK entity. Non-resident directors are viewed as having an office or employment in the UK, so care needs to be taken to meet these payroll obligations.

The compensation that relates to directors’ duties in the UK should be reported through UK payroll with the appropriate PAYE and NIC deductions. The NIC position can be quite complex (see below).

In order to establish which easements apply, it is important for an employer to consider where their STBVs are visiting the UK from. This has two meanings:

  • which country
  • from what type of entity (specifically whether the entity is a branch of a UK organisation).

Short-term business visitor agreement (STBVA)

This agreement provides exemption from PAYE where there is relief under Double Taxation Agreements (DTA).

The OECD model treaty sets out the relief criterion as:

  • Employee is present in the UK for a period not exceeding 183 days (in any 12 month period or ending in the fiscal year applicable).
  • Remuneration is paid by, or on behalf of, an employer who is not resident in the UK.
  • Remuneration is not borne by a permanent establishment which the employer has in the UK.
  • Coming to work in the UK 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.
    • Expected to stay in the UK for 183 days, or less, in any twelve month period. For this purpose, presence in the UK, however brief, counts as a day of presence for the purposes of determining the 183 day period.

The 60-day rule

In summary, this rule allow enables a position that means that a cross charge to the UK (which would normally deny relief under the DTA) is not conclusive, if the period of work in the UK is less than 60 days.

Employers also need to show that the employees are on an overseas payroll and the period (up to 60 days) does not form part of a more substantive period. The STBVA can’t be used for employees visiting from branches of a UK entity.

They must also consider how HMRC applies the concept of the ‘Economic Employer’.

PAYE special arrangement for STBVs

This arrangement, formally known as an Appendix 8 arrangement allows the set-up of an annual PAYE scheme, for circumstances where an Appendix 4 arrangement does not apply. For example, because the short-term business visitor is employed by an overseas branch of a UK company or comes from a country which does not have a Double Tax Agreement with the UK.

The arrangement will allow the employer to submit an annual return to HMRC at the end of the tax year rather than in real time. This reduces administrative burden placed on the UK company. It also means that short-term business visitors with no overall liability do not need to have PAYE tax deducted and then apply for repayments through self-assessment.

The Appendix 8 arrangement is available where the short-term business visitor has no more than 60 workdays in the UK in a tax year. The submission of the annual return and payment of any PAYE taxes due must be made by 31 May following the end of the tax year.

HMRC accepts that the 60 UK workdays limit does not include workdays where the duties performed were incidental to a role held overseas, but the definition of ‘incidental duties’ only applies in limited circumstances.

Social Security

Employers also a need to consider National Insurance Contributions (NICs) rules.

Because STBVs usually live in another country, establishing NICs due requires a cross-border perspective. It’s normally necessary to understand if the domestic rules are applicable, or if rules under specific agreements apply.

UK Domestic Legislation

The law provides for a potential social security liability on an employee who arrives in the GB to work even if they only spend a single day in the UK.

The legislation does provide for an exemption linked to 52 weeks of continuous residence in the UK, so NIC could be due after 52 weeks.

A UK entity may also have a social security liability if they are treated as ‘host’ employer under the special rules in the ‘Social Security (Categorisation of Earners) Regulations 1978’.

European Regulations

A person working in the UK may be covered by the regulations which cover the EU and Iceland, Liechtenstein, Norway and Switzerland. If so, the UK domestic legislation is overridden.

The EU rules allow contributions to be paid in a single country and there is a developed certification process (Forms A1 are issued) to support this.

To determine the applicable EU legislation, various factors have to be considered. These include:

  • the habitual residence
  • the amount of working time in the country of habitual residence
  • the amount of time working in Member States outside the country of habitual residence.


In some Member States a non-executive director may be considered self-employed. A policy concession for non-resident directors who attend board meetings in the UK (so that no UK NIC is due) does not apply where the EC Regulations are applicable.

Social Security Agreements

The UK has social security agreements with some non-EU countries. The basic principle of these is that social security is payable in the country in which the employee is resident, provided certain conditions are met. A certificate of coverage is required to confirm the position.

How we can help

STBVs provide a real challenge for UK employers. The key message is do something – doing nothing is not an option.

Seeking specialist advice is a good idea, and we have the expertise and experience to help you navigate this complex area. Crowe also provides a unique solution, TrackMyTrip, which offers a market-leading tool for those working with STBVs, in a cost effective manner.

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Our Global Mobility experts cover some of the many different concepts of mobility and what it means in everyday terms. 

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Dinesh Jangra
Dinesh (Dino) Jangra
Partner, Workforce Advisory