If you are bringing employees from overseas to work in the UK, we can help ensure that you comply with your employer obligations and save the company money.
Here are some of the ways in which Xpatria can help you:
- PAYE - Did you know that if you receive employees from your overseas operations you should usually operate PAYE on their total remuneration, whether paid in the UK or overseas? Failure to do so can result in the UK company becoming liable for grossed up PAYE, interest and penalties. You will also need to report the overseas remuneration to HM Revenue & Customs.Xpatria can run a tax-only payroll to calculate the PAYE due on total remuneration wherever it’s paid. We also prepare and electronically file tax reports with HM Revenue & Customs for the expat employees affected, so you can run your UK payroll as normal secure in the knowledge that you’re complying with your statutory obligations.
- P11Ds - And did you know that if you receive employees from your overseas operations you should report all benefits in kind on their P11Ds, whether provided in the UK or overseas? Failure to do so can result in penalties for incorrect P11Ds and a grossed up benefit in kind tax charge. Typical benefits overlooked include private health coverage and moving expenses paid overseas.Xpatria provides a comprehensive P11D service for your expat employees. We ask the right questions so you can be sure that you are filing complete and accurate information. We can obtain P11D dispensations from HM Revenue & Customs to minimise your P11D reporting.
- Tax equalisation/protection - To ensure that overseas staff focus on their job (and not on how much tax they’re paying), many companies operate tax equalisation or protection programmes. These schemes operate in various ways, but their main aim is to ensure that expats receive a guaranteed net salary and benefits package, so that they can budget properly. The employer normally pays the expat’s host country taxes.We can guide you through the different methods of tax equalising or protecting your expat employees to determine what’s right for your company. Whether you’re considering implementing a new programme or whether you want to review your existing scheme, we can help. There is usually a cost to the employer for operating these schemes (which we can quantify for you) but many companies believe that this is offset by expats feeling secure about their tax position and consequently focusing on their new roles in the UK.
- Saving tax on non-UK workdays - If overseas staff are seconded to work in the UK for less than three years, we may be able to help them avoid UK tax on the income relating to any days they spend working outside the UK. To qualify for this tax saving, the income that relates to their non-UK workdays must be paid outside the UK and there are restrictions on repatriating this income to the UK. If the company operates a tax equalisation programme (see previous section), any tax savings arising from non-UK workdays will accrue to the company, which can save you tax.Xpatria can claim this tax relief on behalf of your expat employees – retrospectively if required. And we can ensure that any tax refunds are paid directly to you. We can also obtain clearance from the UK tax authorities to enable you to reduce the PAYE you pay by the amount of this tax relief.
- Tax free employer provided items - If overseas staff come to the UK for less than two years and you provide them with accommodation, and reimburse travel and subsistence costs, you may be able to give these items to your staff tax free. If the company operates a tax equalisation programme, this is a valuable tax saving, especially in high cost housing areas.We can claim these tax savings for you – retrospectively if required. We can also help you to reduce your reporting responsibilities on certain items by applying for P11D dispensations on certain company provided items.
- Avoiding share plans nightmares - Do your expats participate in non-UK share plans whilst they are working in the UK? Non-UK share plans are often taxed differently in the UK and the home country. The legislation in this area is complex and has changed frequently during the last few years. UK tax and resulting PAYE obligations usually hinge on where the expat is resident on grant, exercise and disposal of shares and share options, and on whether the UK has a tax treaty with the home country. So careful monitoring of expat movements and share plan events is important.Many employers choose not to tax equalise share plan income due to potentially enormous tax bills. However, you may still be obliged to withhold PAYE on certain share plan events and we can clarify your PAYE obligations so you are fully compliant. We can also help you to communicate potential tax charges to expat staff before they occur so that there are no unwelcome surprises.
- Social security – Many employees can continue to contribute to their home country social security system whilst working in the UK. This exempts both them and the company from paying UK National Insurance contributions. Alternatively, if home country social security costs are high, you may prefer them to participate in the National Insurance system.Xpatria can help you review the social security options available to you and your expat employees, and make the relevant social security applications for your employees to remain in their home country system (where applicable). We gauge the cost of paying into each social security system for you and for your expats (both financially and in terms of benefit coverage for your expats).
- Short term expats, business visitors and PAYE - Sometimes it’s possible for overseas staff to work in the UK without paying tax here. Generally this occurs where they spend only short periods of time in the UK, and where the UK and their home country have a tax treaty. The qualifying criteria vary slightly from country to country but usually expats spending less than six months in the UK may be eligible for tax exemption.Companies need to ensure that they formalise this tax exemption with HM Revenue & Customs. And if employees from your overseas operations regularly visit the UK on business you may need to claim tax exemption for them too. Without a formal claim, you may need to operate PAYE on their pay.We can assess your short term expats and business visitors to determine whether they are eligible for tax exemption. We prepare and file all necessary reports and exemption claims with HM Revenue & Customs. And we can help you draft and implement internal guidelines so key personnel in the UK and overseas are aware of the information that they need to collate for you to claim PAYE exemption.
- Employee arrival briefings – When overseas employees work in the UK they need to declare their presence and their tax status to HM Revenue & Customs. It is important that they declare their tax status correctly, as mistakes can mean that both they and the company become ineligible for certain tax breaks.Xpatria can perform arrival briefings with your expat employees and help them complete the relevant forms so that their tax status is accurate and they qualify for all available tax reliefs. During the briefing we discuss all applicable tax issues with the expat so that they are aware how they will be taxed whilst working in the UK and know what records to keep. We can also help them avoid UK tax on their overseas investment income and the arrival briefing is an ideal opportunity for us to ensure they understand this potentially complex area.
- Hassle free tax filing In addition to tax planning, we provide a friendly and efficient tax return service. Xpatria prepares your expat employees’ tax returns (claiming all appropriate tax reliefs) and calculates their tax liabilities. If you operate a tax equalisation programme, we will direct any tax refunds to you as appropriate. We always provide a written explanation of the tax return and our advisers are on hand to discuss the tax return if required. We will send your expats their tax return in pdf format and file it electronically with the UK tax authorities on their behalf. Our tax return service includes liaison with the UK tax authorities (if required).
- Reduced stress expat PAYE auditsPAYE audits are never entirely stress free, but if the UK tax authorities choose to audit your expat population, Xpatria will support you throughout this process. We will liaise with HM Revenue & Customs on your behalf, attend any meetings with them and deal with any correspondence from them. We help to resolve tax audits promptly and fairly.
- Cost control - Have you evaluated your expat compensation and benefit packages? Do they deliver what you intended? Different categories of expat employees have different needs. How do you treat your short term, long term and commuter expats? How long does a secondment last before it becomes a local hire? What happens on repatriation? And on termination?Xpatria works with you to develop robust yet practical international assignment policies to support your expat staffing needs and help you control cost.
Xpatria provides a wide range of services to companies bringing overseas personnel to work in the UK. Please contact us to obtain specific details of how we can help you. Why not take advantage of our free employer consultation service?