Short term business visitors from overseas

The Government has issued a consultation document looking at possibilities for simplifying the administration for businesses where business visitors come to work in the UK from an overseas branch for short periods.

The Government is consulting on extending administrative simplification to scenarios where business visitors come to work in the UK from an overseas branch for short periods. The Consultation Document, “Tax and Administrative Treatment of Short Term Business Visitors from Overseas Branches”, puts forward two proposals for such scenarios and seeks consultation responses by 06 August 2018.


Under current rules, where a short term business visitor (STBV) comes to the UK to work for a UK company, that company must in principle operate PAYE on the individual’s earnings in the normal way. In addition, the STBV may need, in principle, to complete a UK tax return and may need to claim double tax relief in their home jurisdiction where they are resident to avoid double taxation on their UK earnings.

However, HM Revenue & Customers (HMRC) permit UK companies with STBVs from overseas subsidiaries to enter into short term business visitor arrangements (STBVAs). These arrangements (described at PAYE82000) relax the normal rules where they apply and ease administration. They also relieve the STBV of the need to pay UK tax on their earnings or file a tax return. HMRC will grant an STBVA where an STBV is:

  • resident in a country with which the UK has a Double Tax Treaty (DTT) covering dependent personal services
  • comes to work for a UK company or branch or is legally employed by a UK employer but economically employed by a separate non-UK entity, and
  • expected to stay in the UK for 183 days or less in any twelve month period.

These rules do not apply however where the STBV comes to work in the UK from an overseas branch of a UK company. This is because the provisions of a DTT (based on Article 15(2) of the OECD Model) only provide for exclusive taxation in the individual’s home country where the remuneration is paid by an employer who is not resident in the UK. Since an overseas branch is not a separate legal entity but is part of the UK company, the STBV is paid by an employer who is resident in the UK even where it is economically borne by the overseas branch.

There are, however, special PAYE arrangements for STBVs which are not eligible for STBVAs where they have 30 or less work days in a tax year. In these cases, PAYE special arrangements (set out at PAYE81950) allow the UK company to operate an annual PAYE scheme and do not require the STBV to submit a UK tax return. However, the individual will usually need to claim double tax relief in their home jurisdiction.


The UK Government is now consulting on extending simplification in two ways.

Firstly, the Government proposes to extend the existing PAYE special arrangement for STBVs ineligible for STBVAs (whether because there is no DTT in place or because they work for an overseas branch of a UK company) from 30 to 60 UK work days. All other conditions and features of the PAYE special arrangement would remain the same.

Secondly, the Government is considering introducing a new and specific tax exemption for STBVs from overseas branches, which would align the treatment of STBVs from overseas branches with those from overseas subsidiaries. As such, the scheme would remove any requirement on the UK company to operate PAYE and prevent double taxation of the STBVs UK earnings. Similar restrictions would apply to the existing STBVA, including the requirement that the STBV be resident in a jurisdiction with an appropriate DTT with the UK and expected to stay in the UK for 183 days or less in a twelve month period.


The consultation is open for responses until 06 August 2018. Any comments may be sent to:

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.