Expatriate Tax

Globalisation and the international nature of modern business mean that more and more companies send their staff overseas.

A recent study by the Institute for Public Policy Research concluded that there are some 6m expat Britons, 2/3rds of whom are abroad for employment reasons.  The UK plays host to a large number of foreign workers as it remains an important market for many overseas businesses and is often first choice as a base for companies seeking expansion into Europe.

Employers and those seconded often struggle to sort out how income should be taxed in each country, and to deal with the paperwork for tax, social security and pensions.  Our Expat team specialises in doing exactly this, minimising disruption to the business and highlighting opportunities to save on-going costs.

Clients range from large multinationails with secondees in lots of countries to individuals relocating overseas.  The areas where they need help include:

Compliance Support

Complying with the local regulations and filing the right forms on time is important if time consuming enquiries and problems from the authorities are to be avoided. Penalties are often imposed for those who fail to comply and ignorance of the rules is rarely accepted as a valid excuse.

In the UK this usually means submitting accurate personal tax returns on time and operating specialised modified or shadow UK payrolls (including year end reconcilliation calculations and annual PAYE reporting) for employers.

Social security contributions can be equally important, not just to avoid breaking the local rules but to also make sure that secondees have access to appropriate benefilds in the short and long term, like health care and pensions.

Co-ordination

Senior executives undertaking tax planning and employers with secondees in numerous countires need to co-ordinate input from advised around the world.  This important role is difficult to fulfil withough experience.  With several sets of rules to consider it can be time consuming and technically challenging to make sure that action proposed in one country does not conflict with that in another.

We enjoy taking on this challenge and have plenty of experience doing it.  We also have extensive contacts with expertise not just in finance but other issues such as work permits and visas.

Planning

It is normally sensible to undertake a planning exercise to minimise overall cost and maximise benefits.  This might cover issues such as the structure of global remuneration packages and whether voluntary national insurance contributions should be paid to maintain the contribution record in the home country.

Most employers develop some policies for their expats to ensure they are treated consistently and equitably. We can help identify the issues which will arise and assist with implementing or overhauling policies, so that secondments run as smoothly as possible.

Many employers especially value our work liaising with staff on challenging issues such as hypothetical taxes payable.

Investigations

A good compliance record can help to reduce the risk of an enquiry by HM Revenue and Customs.  When they do carry out reviews, known as compliance checks, we ensure that these are dealt with as efficiently as possible and that any interest and penalties are minimised.

Our Team

Our team consists of advisers who have trained with the big 4 accountancy firms and HM Revenue and Customs.

It is led by Oliver Heslop.  He is a member of the Association of Taxation Technicians and has spend more than 15 years specialising in expatriate taxation.  Oliver lived in Poland as an expat for six months so has personal experience of the issues, red tape and complexitie involved.  He is the UK tax adviser on the website www.expatfocus.com which has about 50,000 members and receives some 750,000 visits every month.  He regularly answers queries for the site's members and has even been interviewed live on expat radio.

For overseas advice we prefer to use locally based advisers who know not just what the rules say bur how they are applied in practice.  Shipleys LLP is a member of AGN International, a worldwide association of separate and independent accounting and consulting firms.  This has more than 200 members with almost 500 offices in about 100 countries.

Our Service is excellent value for money, with hourly rates significantly less than our competitors', and experienced staff who understand what needs to be done.

We like to get to know our clients, whether employers or secondees, and to provide a personal service based on long term relationships and understanding of the real issues.  Our UK compliance work for example is done by the same team as any planning.

Specific advice should be obtained before taking action, or refraining from taking action, on any of the subjects covered above. Please talk to your usual Shipleys contact.