We outline key themes developed by analyzing broader business and Human Capital trends as well as deep-dive interviews with Global Talent leaders. Stay informed about all our latest updates and services, and sign up to our email newsletter. The remainder of this Chapter focuses on the specific issues respondents raised and their suggestions for the UK to consider unilateral action. While considering these proposals, HMRC will wish to strike an appropriate balance between facilitating cross-border working and deviating from international standards, creating new burdens and potentially introducing new opportunities for avoidance.

As remote work arrangements, enabled by technology, become more popular, it’s not just companies and their employees who stand to benefit. Studies show that flexibility in working arrangements can produce significant benefits for the broader economy and act as a catalyst for improved productivity and growth. A Chartered Tax Adviser who specialises in expatriate tax should be able to assist with issues relating to UK tax and social security. For the other UK legal aspects, we recommend seeking legal advice from a suitably qualified solicitor.

Mobility, Immigration, HR & Payroll Services

Most respondents had taken the view that government policy and messaging implied a desire to have people back at the workplace, stimulating the economy and using public transport. This led to suggestions that home to work travel could be incentivised through the tax system by allowing commuting costs to be tax-deductible. Notably, very few employers were paying, or had plans to pay, for their employees’ commute. As well as improving guidance in specific areas, respondents also called for clear and easily accessible HMRC guidance bringing together all the different areas that need to be considered when individuals are working remotely abroad either short-term or longer-term. Respondents told us that it would also be useful to have guidance for individuals working remotely in the UK for overseas employers and that there should be guidance aimed at employees as well at employers.

These ideas were also suggested as potentially enabling contribution to the UK economy by allowing short-term visitors a frictionless entry to the UK. Many respondents noted this as in keeping with the wider move to ‘Digital Nomad’ visas (see Chapter 2), and as fitting with a perceived government agenda to make the UK a frictionless place to come and spend time and money. All these changes (apart from improving guidance) would come at an Exchequer cost; the government will no doubt consider priorities in a broader policy context.

Sending an employee to work overseas

Whilst short-term productivity seems to have increased, data scientists at Microsoft found that remote work could hinder innovation. Innovation is generally generated by interactions across different networks, but remote work tends to increase the interaction of employees within the same network and to reduce the interaction between different ones. In addition, research finds that employees consider that remote and hybrid work could hinder their professional and personal development and career progression.

Some noted that, in the example above, the UK headquarters would generally reimburse the German company the costs of the employee, plus an appropriate mark-up to reflect the value they provided and felt this should be a proportionate approach. It was mentioned that simplification of the rules for short-term visits to the UK similar to those suggested for tax of cross-border teleworkers by the European Economic and Social Committee[footnote 64] would be welcomed. Payroll compliance is an issue for both outbound employees working overseas for UK businesses, and inbound employees working in the UK how companies benefit when employees work remotely for overseas businesses. The increase in hybrid and distance working has given rise to more complex cases in certain circumstances, for example, someone who is employed in France and in the past would have worked fully from France can now spend two weeks a month working from home in the UK. Respondents felt increased guidance on various hybrid and distance working scenarios would be extremely helpful. Furthermore, respondents asked for a dedicated point of contact at HMRC to deal with queries quickly as their recent experience has been that it is taking several months to receive a response.