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Short Term Business Visitors

Short Term Business Visitors - and recent Internal audit

I work for a small company based in the UK, which is now part of large EU group.  We are very autonomous.  We have just had an internal audit (2 weeks) of HQ personnel on-site.  In my view, they added nothing productive to our business,  this inspection was purely to ensure that we were complying with the group policies and procedures, as such it is for the HQ's benefit not ours.  I can fully understand the HMRC's view that if people to come to do productive work then tax may be due.  However when people come to inspect us I would argue that no valuable work is done. 

Similarly, if they send a person over to us for instruction on their procedures / training, I would argue that this too is not valuable work for the UK company.  It is merely compliance with the groups procedures.

Am I correct in not classing these as a short-term business visit and so no PAYE is due?

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20th Mar 2019 10:14

Quote:

I can fully understand the HMRC's view that if people to come to do productive work then tax may be due.

I can't understand that. No idea what you mean. If you are part of a large group then you presumably have an internal tax function to whom the question might more usefully be addressed.

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20th Mar 2019 10:39

Out of interest what would be your view if they had been considered productive eg found a huge fraud?

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20th Mar 2019 11:40

"Thanks" for the replies.
Tax function is overseas and they have no expertise in UK tax.

As for fraud, they didn't so it is not worth speculating.

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20th Mar 2019 12:24

I find your question very unclear. What payments are you asking if tax is due on, and by whom or what were they made?

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20th Mar 2019 12:25

If you are now part of a group, it is reasonable that they would want to check your processes are consistent with the rest of the group? Presumably the company is now owned by them rather than a UK team, so it is tough luck?
Are they asking you to put these people on your payroll for a few weeks? I would have thought an interco recharge would deal with this better.

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20th Mar 2019 16:47

Unless the internal auditors are employed by the UK company, why would they have a UK liability for a two-week visit on head office business? They are employees of another group entity working to carry out the group's stewardship function. It's no different from one of your customers sending over their chief engineer to help your production staff to design and build a piece of kit exactly to their specification - you wouldn't dream of putting him or her on the payroll, would you? You may be getting confused by HMRC's condoc on STBVs from overseas branches of a UK entity (rather than foreign employers), whose details still have to be reported annually if they are here for 30 days or fewer. https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye82000 might help, but watch carefully for where it and associated pages distinguish between foreign employers and foreign branches of a UK entity.

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21st Mar 2019 10:57

Many thanks for your assistance.

This question has arisen as a tax advisor has sent us the note below and I was merely trying to establish when a visitor is a visitor or a worker from an HMRC perspective!

""HMRC insists that you must track visitors into the UK and will not accept that this is too difficult a process to manage. Your Company must then either:

• Operate PAYE under the usual regulations in respect of visitors, or
• Sign up to a formal agreement with HMRC (which enables you to remove certain individuals from the PAYE process) before the end of the tax year and complete an annual report by 31 May following the end of the tax year.
• Where the agreement does not apply to particular individuals, you must still operate PAYE – there is no alternative.

Note - there is no de minimis limit, if a visitor spends even a single day working in the UK, PAYE must be operated without an agreement in place (or where the terms of agreement does not apply).""

This is a very difficult area as clearly we don't know their salary!

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to Doc Bill
22nd Mar 2019 13:21

This is the strict interpretation of the regulations. There is an established simplification which means that you don't have to account for PAYE (as hinted at in the second bullet point).

For details search gov.uk for CWG2 Employer Further Guide to PAYE and NIC and for PAYE manual 82000

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