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How the new SRT rules affect your Short Term Business Visitor agreements?

15 October 13 | By: Jas Jhooty

Business Visitor

In last week’s article we looked in some detail at the new rules surrounding the new Statutory Residency Test (SRT). Luckily most employers can enter into a little known agreement with HMRC called a Short Term Business Visitor Agreement to minimise the amount of work they have to do under the new SRT regime.

What is a Short Term Business Visitor Agreement

Nearly all employers who have employees visiting the UK from abroad on a short term basis can take advantage of a longstanding arrangement set out in appendix 4 of HMRC’s Employment Procedures Manual. Employers can agree with their HMRC office to relax the PAYE requirements for employees on short-term business visits to the UK.

In most circumstances, if an employee performs duties in the UK for whatever period, his employer must account for PAYE.

Where, however, an employee is:
  • resident in a country with which the UK has a double taxation agreement under which the dependent personal services/income from employment article (Article 15 or the equivalent) is likely to be competent, and
  • is coming to work in the UK for a UK company or the UK branch of an overseas company, and
  • is expected to stay in the UK for 183 days or less in any 12-month period,

so long as the UK company or branch will not ultimately bear the cost of the employee’s remuneration and certain other conditions are met, they can agree with HMRC that they need not operate PAYE in respect of those duties.

Changes to existing Short Term Business Visitors agreement from 2013/14

With effect from 6 April 2013, after the introduction of the new SRT rules all existing Short Term Business Visitors agreement have been amended as follows:
  1. Appendix 4 agreements apply to dual residents where the employee is treaty resident in the overseas state (previously the employee had to be non U.K. resident).
  2. Under the new RTI payroll reporting regime, employees covered by an Appendix 4 agreement will not be included in monthly submissions to HMRC.
  3. The agreement has to be signed by the business and has to be authorized by HMRC.
  4. Reporting for the 1 to 30-days, 31 to 60-days, and 61 to 90-days categories are unchanged.
  5. 91 to 183-days category has been split into 91 to 150-days and 151 to 183-days categories with the following reporting requirements:

Visitors to the UK 91 to 150 days: For an employee in the UK for a period of 91 days but not exceeding 150 days in the tax year PAYE can be disregarded provided that (a) all of the information requested for visitors up to 90 days is provided and in addition (b) in the case of non US citizens and Green Card holders the employee provides a statement from the overseas Revenue authority confirming residence in the other state for tax purposes throughout the period in the UK. This statement should be passed to the HMRC Office by 31 May following the end of the relevant overseas tax year. This arrangement is only provisional until the relevant certificate is received. In the case of US citizens it will only be necessary for the employee to provide evidence of continuing residence in the US.

6. New category of 151 to 183 days. As noted in the draft agreement

Visitors to the UK 151 to 183 days: Applications will be made on a named individual basis for authority to include the employee in this arrangement. The application will be made as soon as it can reasonably be anticipated that the employee will be present in the UK for more than 150 days. The application will include (a) all of the information requested for visitors up to 90 days and confirmation that the statement from the overseas Revenue authority will follow by the relevant 31 May, and (b) a statement by the employee giving reasons why he/she considers himself/herself to be treaty resident in the treaty partner country by reference to the appropriate article in the relevant Double Taxation Treaty.

For more information see Helpsheet HS302 about dual residence generally and the tests to be applied to determine the country of tax residence.

HMRC will consider the circumstances and will (1) notify the employer that the individual can be included in the Appendix 4 arrangement, or (2) authorise code NT and issue a Self Assessment Tax Return, or (3) confirm that PAYE should be applied and issue a Self Assessment Tax Return.

How emTax can help

emTax consultants can assist you in entering into Short Term Business Visitors agreement with HMRC or can review your existing arrangements to make sure they will adhere to the new SRT rules.

As experts in all areas of employment tax legislation and we pride ourselves in providing a value for money service that offers the same quality of service as the “Big 4” accountancy firms but at a fraction of their prices.

If you are interested in this or any other employment tax service, please do not hesitate to contact us.



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