The Office of Tax Simplification (OTS) has published its report on the tax complexities driven by hybrid working, including for periods where employees choose to work overseas. Key findings include:
businesses see hybrid working as here to stay and are planning accordingly;
offering employees the ability to work some of the time at home in the UK is almost universal;
employers would like to see a review of the expenses and benefits systems, and HMRC guidance improved;
on both cross-border payroll and social security issues, businesses want to see improved HMRC processes, turnaround times, more PAYE relaxations and better guidance; and
multinational businesses want to see the UK taking a lead on how permanent establishment and transfer pricing interact with staff who choose to work overseas for personal reasons both for short periods and also in the longer term.
Employment tax specialist Philip Swinburn (Macfarlanes) observed: ‘The release of the OTS findings identifies many of the challenges of the UK tax system, but much of the focus of the report is on the complexity of the existing rules and the need for either further review, or changes to the rules in a multilateral context (e.g. the OECD framework). It will be interesting to see if the UK government or the OECD pick up the baton in 2023 to tackle the issues presented.’
The Office of Tax Simplification (OTS) has published its report on the tax complexities driven by hybrid working, including for periods where employees choose to work overseas. Key findings include:
businesses see hybrid working as here to stay and are planning accordingly;
offering employees the ability to work some of the time at home in the UK is almost universal;
employers would like to see a review of the expenses and benefits systems, and HMRC guidance improved;
on both cross-border payroll and social security issues, businesses want to see improved HMRC processes, turnaround times, more PAYE relaxations and better guidance; and
multinational businesses want to see the UK taking a lead on how permanent establishment and transfer pricing interact with staff who choose to work overseas for personal reasons both for short periods and also in the longer term.
Employment tax specialist Philip Swinburn (Macfarlanes) observed: ‘The release of the OTS findings identifies many of the challenges of the UK tax system, but much of the focus of the report is on the complexity of the existing rules and the need for either further review, or changes to the rules in a multilateral context (e.g. the OECD framework). It will be interesting to see if the UK government or the OECD pick up the baton in 2023 to tackle the issues presented.’
