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Last updated: 3 Nov 2022
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Why do employers need to be aware of the implications of working from home abroad?

At our latest global mobility roundtable, our experts were joined by a group of industry leading advisers to discuss international working from home. Here are the key considerations for employers.

The rise in working from home, throughout and since the COVID-19 pandemic, has already sparked a large shift in how the majority of employers manage their employees. With the challenge of resource and recruitment, working from home is now seen as an essential benefit for many people looking for jobs. Ian Macmillan at Hudson McKenzie says “there has actually been a role reversal. Employers have had to become more agile, and in most cases, even more accommodating to the new dynamics we are facing. Candidates, at this time, feel they are able to influence and control the negotiation, their expectations have changed, and businesses have had to become more empathetic to these new needs.”

Now, as we’re learning of many employees working from home in a different country to their employer, Arnaud Ruff at Ruff & Associés says there’s even greater considerations worldwide. “Global mobility is a real issue that has to be considered both for employers managing employees, and for us as advisers. We’re now seeing international working that has much wider tax implications than people are aware of.”

Many employers and their employees are unaware of the implications of international working from home. Lucie Bennett at Forsters says “there’s a common misconception that you can just move abroad, get settled and then worry about everything else later. Before Brexit, restrictions on work and travel within the EU weren’t often a big consideration for many UK citizens and people just aren't used to thinking about it, but they now need to.”

What do employees need to consider?

What do employees need to consider for international working from home?

The three main considerations are tax, social security, and payroll. Paul Baker at Buzzacott shared that “the UK tax law hasn't really changed that much compared to what they were like before COVID-19. From an international working from home perspective, it's trying to fit a new way of working into old tax laws, both in the UK and wherever the employee is working.” Therefore, its key for employers to seek professional advice to ensure they’re compliant.

In some scenarios, employers find out that their employees have worked from home abroad after the event. Dawn Downing at Buzzacott says one main challenge is “many employers haven’t included policies around this in employment contracts. Employers need to keep better track of their employees to prevent hearing about it after it’s already happened, as the impact can be detrimental.”

Another challenge highlighted by Dawn is that “some employers have offered international working from home to their employees, perhaps without understanding the implications first, and are now in a situation where their employees are happy with that arrangement and they’re at risk of losing staff if they make changes.” Tony Baldassarro at LSS Relocation agreed that “employees now have an expectation, but they often find that their dream suddenly becomes a nightmare when they discover the outcomes.”

As well as employees, Maud Mestre at Ruff & Associés says that the self-employed need to also consider the implications because “where they’re registered and where the activity is taking place is key. There’s confusion around the characterisation of a permanent establishment, which can lead to increased tax exposure in both the home and host countries.”

Although many associate working from home with less travel, especially with the introduction of international video calls replacing in-person meetings, another challenge highlighted by Rahul Batra at Hudson McKenzie is that “the increased freedom of staff working around the globe can give them a sense of entitlement to work wherever they want. This can actually instead lead to an increase in travel, which fights against the employer’s ESG efforts.”

What happens if employers don't comply?

What happens if employers don’t comply?

Failure to comply with the tax, social security and payroll legislation can lead to investigations and penalties in both countries. Rectifying these issues comes at a significant cost. Paul Baker at Buzzacott finds that “the repercussions can be detrimental for many businesses. Not taking advice beforehand, and failure to action anything in the years after the event, makes it difficult to unwind and rectify when identified.”

Although the significant rise in working from home abroad is fairly recent, don’t expect any leniency from the tax authorities. Paul adds that “the tax systems aren’t currently designed for people that are globally mobile, particularly without it being on a more formalised arrangement such as a secondment program. However, we do expect the tax authorities to look into employers and employees tax affairs, investigate retrospectively and penalise accordingly.”

What should you do?

What should you do?

  1. Check if there are any current cases of working from home abroad among your employees and seek professional advice on how to rectify issues and comply, in both countries.
  2. Review your employment contracts to ensure any policies around working from home abroad are included and in line with what you want to offer your employees. 
  3. Plan ahead for any future working from home abroad cases to ensure you’re compliant from the start and avoid any issues piling up overtime.

Click here to find out more about the quoted advisers

Buzzacott provides global mobility services to individuals and businesses with a UK interest, no matter where in the world they're located. Whether it's advice on starting a new life chapter, travelling for business, taking employees to fresh corners of the globe, or working in a different country to your employer - we can help.

Paul Baker is a Director at Buzzacott who helps his clients navigate through both US and UK tax systems. He offers proactive cross-border tax compliance services, global mobility and bespoke personal US and UK tax advice tailored to individual circumstances.

Dawn Downing is a Senior Manager at Buzzacott. She is an international payroll specialist, delivering practical payroll solutions to clients in the UK and overseas.

Ian Macmillan is a Senior Vice President at Hudson McKenzie. He has over 30 years’ experience in global mobility, specifically in the field of international moving and relocation, and more recently in immigration. He specialises in constructing bespoke and tailored programmes for individuals, families, and companies, worldwide.

Rahul Batra is Managing Partner and Head of Hudson McKenzie’s Business Immigration group and is licensed to practice law in both India and the UK. He acts for high profile corporate clients, from major multinationals to start-up businesses, as well as high net worth individuals.

Arnaud Ruff is Managing Partner at Ruff & Associés. He works with company leaders in real estate, the services sectors and the wine cultivation sector. Ruff & Associés is based in France, and (like Buzzacott) is a member of PrimeGlobal; an award-winning association of independent accounting and business advisory firms.

Maud Mestre is a Director at Ruff & Associés who specialises in personal taxation. She assists employees and business mobility managers when leaving or arriving in France, and advises on tax residence, social security, remuneration, tax options and the preparation of tax returns.

Tony Baldassarro is Owner/Director of LSS Relocation. He is an experienced global mobility professional with a demonstrated history of working in the human resources industry. Tony specialises in global mobility, HR consulting, and relocation management.

Lucie Bennett is an Associate at Forsters who acts for both UK and international clients on a broad range of estate planning and personal taxation matters. Much of her experience has an international dimension and she has a particular interest in advising clients in relation to US/UK cross-border matters. Lucie also undertakes work in relation to high-net worth UK immigration.


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For professional tax, social security or payroll advice tailored to your unique circumstances, please fill out the form below and one of our global mobility experts will be in touch to discuss your requirements and how we can help.

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