Analyses & Studies

Remote working: employee mobility trends and risk management

The global pandemic has tested our ability to work outside an office. Vanesha Kistoo Director of Blick Rothenberg explores the issues arising when employees are allowed to choose where they work from.

According to the Hays Equality, Diversity & Inclusion Report 2020, 70 percent of professionals say that working flexibly is essential or important to them. Large companies like Siemens, Twitter, Facebook, Google, Microsoft and Slack have transitioned to adopt remote working on a permanent basis. Companies with a more traditional organisational culture are doing their best to adapt and navigate the current travel restrictions to minimise disruption to business operations whilst prioritising employee wellbeing. The emerging trends are:

1. Strict travel requirements mean employees are unable to easily travel for short business trips; they are getting used to conducting business meetings virtually. Where business needs require, employees are travelling to spend a longer period in a location.

2. Employees are moving further away from their normal place of place and are discussing and agreeing a hybrid work arrangement.

3. Employers see remote working as an opportunity to tap into a larger talent pool. Benefit schemes are being reviewed to align with employee needs.

4. Senior executives who have homes in other countries are asking to work remotely from the place where they are most comfortable, e.g. size of house, better weather etc.

5. Employees who previously did not think about working remotely are now looking at options because more countries are promoting remote working by launching attractive visa programs, e.g. Barbados and Bermuda.

Income tax

Unless an employee can claim an exemption under a double tax treaty agreement with the UK, the general rule is that UK income tax will be due on the income that relates to the duties an employee performs in the UK, regardlessof where they are paid or employed.

Where a country has a double tax treaty agreement with the UK and an employee spends less than 30 days in the UK, in a UK tax year, their presence in the UK should not trigger tax reporting obligations for themselves or their foreign employer. Where the number of days spent in the UK exceeds 30 days or the employee has a senior role within a company e.g. a CEO, the UK reporting should be carefully considered.

Social security

Employees who are either working in more than one EU Member state or in a country with which the UK has a social security agreement, can avoid a double social security charge or remain on the social security system of the country of employment provided certain conditions are met and a confirmation is obtained from the relevant authorities. Employees who spend time working in non-EU Member states or countries with which the UK does not have a social security agreement, have less protection.

Payroll obligations

Some employees satisfy the conditions to be exempt from being included on a UK payroll e.g. Short-Term Business Visitor. However, irrespective of the number of days an employee spends working in the UK, an employer should assess whether they need to operate a UK payroll for an employee.

Corporate tax issues

Generally, employees who are temporarily working remotely from the UK for a non-UK employer, would not create a corporate presence in the UK for the non-UK employer. However, the risks increase if the employee is a senior member of staff and/or spends a significant amount of time working from the UK over a period.

This article was published in INFO Magazine Autumn 2020: How business will adapt. Read the whole issue here