International Assignee Tax Services

To reach beyond traditional markets and drive continued growth, companies increasingly need the ability to manage and deploy talent across geographical borders with increased speed and more effectiveness than ever before. Management of home and host tax compliance is a key undertaking for mobility programmes, not just in terms of minimising the risk for the individual, but also in terms of the reputational risk for the company and their relations with various authorities.

Deloitte has widespread experience working with multi-national corporations through to companies with a smaller team of international assignees. An extensive network of member firms and contacts ensure that we can identify tax management opportunities in addition to delivering globally co-ordinated service across multiple jurisdictions.  

Issues and trends

In the UK, our clients are faced with the following challenges:

Statutory Residency Test
The Government is in the process of finalising the details of a new UK statutory residence test (“SRT”), which is expected to take effect from 6 April 2013, in answer to commentary that the current rules do not offer sufficient certainty to visitors to the UK. In determining their tax residence individuals will need to take into account certain specified connection factors with the UK (and abroad), and the number of days they spend in the UK. The outcome of this test will be vital for employers when planning assignments to and from the UK, in order to avoid potential double tax charges and manage tax compliance for their programmes.

Increased focus cost mitigation
The economic environment has added pressure on organisations to deliver reduced costs for international assignment programmes whilst still attracting top talent into international roles. Deloitte can help employers review the cost of their programme and with a view to identifying and realising cost reductions including from the delivery of assignment related benefits e.g. housing.

New penalty regime impact
A significant number of employers have been impacted by the new penalty regime introduced for tax returns and late tax payments. Employers are facing covering the costs in respect of tax equalised assignees as more people are caught by the £100 penalty for late filing of self-assessment tax returns. Additional penalties will be charged for returns still unfiled after 3 months of the filing deadline, including daily and tax geared penalties. In addition, the new penalty regime has wider ranging implications including the payment of PAYE.

Identify, tracking and reporting of business travellers
Managing compliance for business travellers remains under increasing focus from the UK tax authorities and the UK Borders Agency, both from a tax and an immigration perspective. In an environment which is becoming increasingly compliance driven, there is a risk to the reputation of companies if they do not track and manage their business travellers effectively. We can assist companies in both the design and management of Business Traveller Programmes tailored to reflect company diversity and needs including the deployment of latest technology such as Smartphone applications.

Our services

We can offer a wide range of tax compliance related services for UK and international organisations across all industry sectors. The services we can assist with include:

• Home and host country personal tax compliance - our central management of the tax compliance programme supports clients with withholding and filing obligations using the latest web enabled tools to simplify this process.
• Tax briefings - face to face or online tax briefings with individuals in their home and host locations to enable the individual to feel comfortable with their home and host tax positions and compliance responsibilities.
• Payroll compliance simplification - working with employers to enable inbound and outbound international assignees to be tax compliant. We can assist with a review of the current international assignee population, make applications to the UK tax authorities to simplify the withholding obligations and deal with the complexities of individuals paid through non UK payrolls and in foreign currencies.
• Implementation and management of assignment policies e.g. tax equalisation - The globally co-ordinated network of teams can support companies in both the design and the operation of assignment policies enable them to be administered in a clear and consistent manner globally.
• Responding to the UK tax authority enquiries into individual tax compliance - review of correspondence and preparation of a response with a view to providing clarity on technical positions.
• Business traveller identifying, tracking and reporting - tailored advice on how to identify business travellers using the most current technology and online tools such as smartphone GPS technology. These technology tools track movements and provide a reporting functionality of data to better assist companies with compliance and regulation.
• Global planning opportunities and tax management - review of global delivery of assignment related benefits e.g. housing to ensure that tax relief is managed in each jurisdiction by structuring payments in a tax efficient way.
• Web-based technology – provision of supporting technology for the tracking and management of international assignees to enable companies to have visibility and control over their obligations and risks, no matter how many assignees companies may have or where they may be.

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