Global Tax Insight Tax risks and opportunities when sending employees and directors to the UK 28 January 2016
Agenda • Blick Rothenberg LLP – who we are • Employee and directors • • UK tax? UK payroll / social security? Opportunities recent changes Companies • • • UK tax? “Branch” Subsidiary
Employee and directors
When is UK employee tax due? § No UK-Brazil income tax treaty! § UK tax from day 1 (no 183 day exemption) § UK statutory residence test § § § Non UK tax resident – UK source UK resident – worldwide income versus “remittance basis” Unilateral credits to avoid double tax
Key opportunities to save UK tax § Temporary living expenses <24 months § Deductions for work outside the UK < 36 months § Shelter offshore income – remittance basis
UK employer obligations § “UK presence” or “UK host” organisation? § UK tax – operate UK payroll withholding from day 1 § Employee versus self employed § STBV – treaty residents only
UK employer obligations § Some common payroll misconceptions X Brazilian withholding X Brazilian employee X Salary paid Brazil ü If a UK “host employer” - operate a UK payroll § Cash flow management § Non resident directors: § Tax returns § Expense reporting
Social security tax (employer and employee) § Different rules! § 52 week - exemption from UK social security tax provided § Remain employed outside the UK § Ordinarily live outside the UK § Pay from week 52 – no notification from HMRC § Other nationalities/residents – Certificate of coverage / A 1
Latest updates § HMRC guidance on expenses § Changes to expense reporting / “dispensations” (6 April 2016) § Pension contributions -> £ 10, 000 (6 April 2016) § Deemed domicile > 15 years (6 April 2017)
Companies
UK Business – when is tax due? “PLACE OF BUSINESS” – Business Establishment not taxable • Ancillary or incidental to business as a whole • Checking out the market • Administration office • Registration at Companies House • Payroll obligation • Generally not subject to corporate tax
UK Business continued … “BRANCH” – Business Establishment taxable • Trading presence • Move from ‘representative office’ to branch • Registration at Companies House • Tax considerations • File accounts of overseas company • No audit
UK Business continued … SUBSIDIARY COMPANY • Limited liability • Incorporation at Companies House • UK audit, if two of the following breached on a group basis: (a) revenues > £ 6. 5 m; (b) total gross assets > £ 3. 26 m; (c) employees > 50
Contact us Mark Abbs Tel: +44 (0)20 7544 8744 Email: mark. abbs@blickrothenberg. com
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