CIOT comments on proposed changes to Short Term Business Visitor PAYE rules
Released 7 August 2018
The Chartered Institute of Taxation (CIOT) has published its comments on HMRC’s consultation Tax and Administrative Treatment of Short Term Business Visitors from Overseas Branches.
At Spring Statement 2018 the Chancellor announced that the Government would consult on ways to improve the tax and administrative treatment of short term business visitors (STBVs) from overseas branches. In the UK there is an administrative easement available to UK companies with STBVs arriving from their overseas subsidiaries. The UK company can apply to relax their obligation to operate Pay As You Earn (PAYE) on the relevant earnings of an individual who meets certain criteria. There is, however, no equivalent easement for UK companies with STBVs arriving from an overseas branch. The CIOT supports the proposal to introduce a new tax exemption for STBVs from overseas branches and recommends the Government proceed with this as soon as possible. Regarding the proposal to extend the PAYE special arrangement UK workday rule for STBVs, the CIOT also considers that the suggestions in relation to improving the special arrangement should be taken forward too in relation to STBVs from non-treaty countries. However, the CIOT considers that the existing 30 workdays limit is unduly short and that there would be a significant increase in those benefitting from the PAYE special arrangement, at no cost to the Exchequer, if it was extended to 60, 90 or 120 workdays.
The CIOT further suggests that the PAYE special arrangement could be further improved by:
(i)extending the date by which employers have to account for the tax due to 31 May, and
(ii)permitting non-UK resident directors to be included within the terms of the special arrangement.