Are You Planning to Send Your Employees To Another Country?

Transcription

1 Are You Planning to Send Your Employees To Another Country? Is absolutely everything taken care of?

2 Taking care of you and your employees When you are planning to send employees to work in another country the one question you must ask yourself is have we covered everything? Aside from offering your employees a pay rise or to cover their housing, travel costs and any relocation fees, you must make sure your employees are totally compliant with the local tax regulations and are aware of any additional contributions they may need to make or rules or laws they will need to adhere to. If you are about to move staff to another country you have a responsibility to consider all of these areas carefully so that your employees don t end up falling foul of local administrations. We are here to help make sure you and they have easy access to all of this information. We will ensure you understand the tax implications linked to your employees new location. We will also make sure their tax residence status is defined and secured (even if that involves residency in more than one country) and that all of your employees are fully tax compliant in their new location. Your specialist advisors David Gibbs, Partner David advises on the various tax implications of cross border transactions and tax efficient company structures. He works with UK companies on expanding overseas. Specialised in setting up holding companies he has access to local advice by working with our Alliott Group members in 70 countries. david.gibbs@alliotts.com +44(0) Jane Greenwood, Head of Global Personal Tax Advisory Jane advises on personal tax, particularly where there is an international aspect involved. She simplifies the complex and provides advice on the taxation of assets and rental income and the tax implication of residence and domicile status. She advises employees of international companies on the tax treatment of their income. jane.greenwood@alliotts.com +44(0)

3 Are you sending employees overseas? If a member of your team is about to start working overseas, you need to find out whether they will continue to be liable to UK tax. Many people think that as long as you are in the UK for less than six months or your salary is paid overseas you won t need to pay tax in the UK. As with most things it is not as simple as that; there are a number of factors you will need to take in to account. To be sure, you and your employees will need specialist advice to highlight and successfully navigate any potential dangers. We can advise you on where in the world their salary will be taxed and whether or not your employee should or could continue to pay UK National Insurance rather than local social security costs. Your employees may have investments in the UK such as rental properties or ISAs. We can help them with their ongoing reporting requirements and advise them on the most tax efficient ways to deal with these investments because, depending on how long they are likely to be out of the UK, there are a number of pitfalls we can help them avoid. Are your employees coming to the UK? As well as advising your employees on their UK tax position once they become resident in the UK, we can also help with all of their tax planning before they arrive in the UK. We will make sure they know exactly what their tax liability is on both their UK and non UK income. We will guide your employees through the various tax reliefs available to individuals not domiciled in the UK and do everything we can to keep their UK tax bill as low as possible. We will help you notify HM Revenue & Customs of your employees arrival in the UK (if required) and make sure that all future taxes are paid and all the necessary tax returns are filed on their behalf.

4 Frequently Asked Questions Q: I am setting up an office in Germany and want to send a member of staff for a year. Do I need to pay for their accomodation and if I do will they have a tax liability? A: You do not need to pay for the accommodation, however you may want to as an employee may be unwilling to work overseas if they incur extra costs. If they remain resident in the UK for tax purposes, there are specific exemptions so the accommodation costs would not be subject to UK tax. In Germany there are exemptions so that the amounts could be paid tax free for certain periods. Q: While my employees are working in my overseas office, can I continue to pay into their pension? A:.There are many variables regarding the types of pensions and it is possible to continue to make contributions. However, the amounts of tax relief will depend on whether you as the employer make the contribution, or the employee pays. Contributions by an employee can only continue for the first five years of non residence. The usual amount and lifetime contribution limits will apply even if the employee is not resident in the UK.

5 Q: Five members of my staff will be setting up a new office in South America. I don t provide private medical insurance at the moment, but should I provide it for their time there? A: Certain countries require an employer to confirm that they have cover in place for their employees so it s advisable to check the regulations for the relevant country. You may also wish to ensure that your employees have access to appropriate medical services in their new location as they may be unwilling to relocate if conditions differ greatly. Q: I am sending staff to Australia where the cost of living is higher. How do I deal with this in their salary? One of the most common ways of remunerating staff whilst they are on secondment is known as tax equalisation and this ensures that the employee ends up with the same amount of net pay as they would in their home country. The employer is responsible for paying the local taxes due and a deduction is made from the employee for hypothetical tax. It is usual for the employer to pay housing and cost of living allowances on top of the net pay.

6 What else do you need to consider and how else can we help? Whether your employees are coming into or leaving the UK, there are other considerations besides tax and National Insurance/Social Security contributions that they will need to deal with. To make access to these additional services as easy as possible we have built a network of trusted partners in every area. Like us these are all experienced specialists in their field and know their job is to provide the highest quality advice with the highest level of service because your employees will have a thousand other things on their minds as their move gets closer. Our network includes: Experts in Immigration It is vital your employees and their families have the correct visas and work permits. We can introduce solicitors who specialise in immigration law and have a wealth of experience in helping people just like your employees settle in a new country. Experts in Employment Your employees contracts will already have been drawn up but a move abroad is a big step so if your employees would like a second opinion our in-house HR team can help. Similarly if you would like a second opinion to make sure your contacts are fit for the purpose of protecting your employees in their new location, we can provide that too. Experts in Protecting What s Important Should your employees want to update their Will to reflect their new circumstances or buy or sell property as a result of their move, we can recommend solicitors who specialise in these areas. Experts in Relocation Finding a place to live and schools for their children will be at the forefront of your employees minds. We can put you in touch with companies who know how to make finding the right local amenities for each employee quick, easy and stress-free.

7 Alliotts and Alliott Group Alliotts is an independent mid-tier firm of Chartered Accountants and business advisors based in London and Guildford. We provide a wide range of national and international clients with a full range of services. Working together is about more than our technical ability, it is essential we deliver the highest levels of client care. This is why we guarantee: YOUR SUCCESS IS AT THE HEART OF EVERYTHING WE DO FOR YOU WE WILL TAKE A PERSONAL INTEREST IN WHAT IS IMPORTANT TO YOU WE FOCUS ON THE BEST WAY TO GET YOU TO WHERE YOU WANT TO BE We also offer every client: Partner involvement We guarantee every piece of work undertaken will have the direct supervision of a partner. This additional layer of experience provides you with a faster and more efficient service. Truly international coverage Alliott Group is an international alliance of 170 independent accounting and legal firms worldwide. Our membership gives us access to tax, accounting and legal expertise in over 70 countries which means that you benefit from local knowledge from a trusted source. CHARTERED ACCOUNTANTS & BUSINESS ADVISORS A Worldwide Alliance of Independent Accounting, Law and Consulting Firms

8 Contact alliotts.com London Guildford Imperial House Kingsway London WC2B 6UN Friary Court High Street Guildford GU1 3DL + 44(0) (0) london@alliotts.com guildford@alliotts.com Alliotts are registered to carry on audit work in the UK and regulated for a range of investment business activities; and licensed to carry out the reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England and Wales. The information set out in this document is based on our understanding as at 1st May The content of this document has been provided for general guidance only. It does not necessarily stand on its own and no responsibility for loss occasioned by any person acting or not acting as a result of this material can be accepted by the writer or Alliotts or any of its partners and employees.