Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Employees working remotely outside the UK during Covid-19 may create – and may already have created – expensive tax liabilities for themselves and their UK employers. As well as potential foreign tax on the employee’s earnings, the employer may acquire payroll deduction and social security contribution obligations in the other jurisdiction. The situation may also raise corporate tax risks for the employer, if the employee’s presence in the other country constitutes a permanent establishment of the employer or calls its place of corporate residence into question.
UK employers with staff abroad should act now to understand and mitigate the risks, which substantially increase once workers have spent 6 months abroad.
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