Short term business visitors to the UK

28 January 2017

HMRC has revised the short term business visitor agreement and has established a specialist team to focus on short term business visitors.  This note from BDO provides business travellers to the UK with some insight into their tax position.


A re-cap of the issue

Short term business visitors (STBVs) are defined as employees of an overseas subsidiary, parent or other group company or organisation coming to work temporarily in the UK. 

The operation of PAYE on the earnings of STBVs has been a topic much debated with HMRC.

HMRC has confirmed that UK resident employers with STBVs can choose to:

  • Sign up for a short term business visitor (STBV) agreement, or
  • Operate pay-as-you-earn (PAYE) tax withholding.

HMRC reiterated its position in January 2014 when it confirmed that, from 6 April 2013, all companies or organisations receiving business visitors that do not hold an agreement and fail to operate PAYE would have an exposure to penalties and interest.  HMRC has now established a specialist STBV team to review companies with short term business visitors to reinforce this position.

However, in many instances, including for Guernsey residents, there is a double tax treaty available which will mitigate the UK tax liability. HMRC recognises this by allowing UK companies and organisations to sign up for a STBV agreement.

When entering into this agreement, HMRC grants a dispensation to the employer not to operate PAYE for those visitors to the UK who qualify for exemption from tax by virtue of a double tax treaty. The UK company or organisation agrees to track who is visiting the UK and to make an annual submission to HMRC (by 31 May following the end of the tax year) reporting the number of visitors and the length of their stays in the UK.

Alternatively, for employers with only one or two business visitors a year, an application for a NT code on a case by case basis could be made. However, PAYE should be operated until the code is received.


The changes

HMRC has revised the STBV agreement in two key ways. First, the agreement has been extended to include individuals who are legally employed by a UK resident employer but are economically employed by a non-UK resident employer.

This extension applies to a UK employee assigned to work outside the UK for a non-UK resident entity, which is considered to be the employee’s economic employer (ie, the non-resident employer bears not only the costs of the employee’s remuneration but also the risks and rewards of the employee’s work), and the employee returns to the UK for short visits to perform duties solely for the non-UK employer.

Second, the new agreement clarifies the position on what is commonly referred to as the ‘60 day rule’. Under the 60 day rule, exemption from income tax in the UK by virtue of a tax treaty will still be allowed, even where the employee’s remuneration costs are recharged to the UK entity, provided all other conditions are met. This is on the basis that the employee’s visits to the UK amount to less than 60 days.

The rule does not apply where the employee’s presence in the tax year totals less than 60 days but is part of an actual or anticipated longer period of presence of 60 days or more.

When counting the 60 days, past visits and future anticipated visits need to be taken into account to establish whether the 60 day rule applies or not.



For further information please contact one of our tax specialists.

Mark Savage , Tax Director |
John Bradley , Tax Director |
André Trebert , Executive Director |