Multinational group companies face various tax compliance challenges when dealing with their globally mobile workforce. With short-term business visits to the UK increasing to near pre-pandemic levels, it is vital for employers to understand their own PAYE compliance obligations. Our employment tax team summarises what employers need to know.


When employees from a non-UK entity travel to the UK and work for the UK business or for the overseas business which already has a UK PAYE presence, employees should be subject to tax via PAYE from day one of working in the UK, regardless of the work duration. If any UK tax is withheld as a result, the employee must subsequently claim the appropriate tax reliefs under a double taxation agreement via a self-assessment UK tax return.  

This is obviously not a practical arrangement for employers, employees or HMRC. It is time-consuming and costly in compliance fees, even though ultimately no UK tax may be due under the double tax treaty. As a result, employers can enter into a Short-term Business Visitors (Appendix 4) agreement with HMRC. 

What is the Short-term Business Visitors agreement?

The Short-term Business Visitors (STBV) agreement displaces the employer’s obligation to report the income via PAYE. Instead, the UK employer is required to file an annual report by 31st  May following the end of the tax year, confirming various details about any short term business visits made by the company, such as the number of days non-UK resident employees were present in the UK during the tax year and certifying that those employees are not employed by the UK employer.  

 We recommend the agreement with HMRC is in place prior to the end of the tax year (5th April) for reporting to be made by 31st May.  

 Please note that no tax is due when reporting via an STBV agreement, it is simply a reporting mechanism to HMRC.  

What rules apply to STBV?

For an STBV agreement to be in place, the following conditions in relation to the individuals visiting the UK must be met: 

  • They must be resident in a country that the UK has a double taxation agreement with and an appropriate employment income exemption; 
  • They are coming to work in the UK for a UK company or the UK branch of an overseas company, and 
  • They are expecting to stay in the UK for 183 days or less in any 12-month period.  

The “60 day rule”

In addition to the other conditions, it is important to note that an employee cannot be included on a STBV agreement if they spend 60 days or more in the UK and their remuneration is borne by the UK company. 

Even when an employee spends less than 60 days in the UK during a single tax year and their renumeration is borne by the UK company, their short term visits cannot form part of a more substantial period – for example, if there is an expectation that an employee comes to the UK for 10 days every three months, this could count as a ‘more substantial period’ even though they are technically in the UK for less than 60 days in total in the tax year.   

Please note that non-resident directors performing UK board duties (e.g. attending board meetings in the UK) cannot be included within an STBV appendix 4 agreement.  

Other potential issues in relation to STBV

  • Accurate monitoring – Many employers struggle with monitoring the travel of their employees and accurately accounting for the days they spend in the UK. It is important for information to be accurately recorded so the appropriate reporting to HMRC can be completed.  
  • Insufficient information provided – Some employers fail to provide sufficient information on short term business visits, such as the purpose of each visit, which makes it difficult to identify the appropriate reporting. In addition, records must be maintained to evidence the purpose of the visit.   
  • Lack of knowledge within firm – The responsibility of arranging and tracking travel may fall to different departments in a business, e.g. HR, finance, Executive Assistant team etc, who may not be aware of the corporate structure of the business and whether recharges are undertaken. Without full details, this can lead to incorrect reporting and future tax liabilities.  
  • Nudge letters from HMRC – There have been nudge letters sent to businesses in recent years regarding their STBV reporting. HMRC will often enquire into the treatment of international business visitors during a PAYE compliance review. Where a company has employees that are globally mobile, having an STBV agreement in place mitigates the risk of PAYE compliance failures as it removes the need for PAYE return submissions and deduction of PAYE tax. It also demonstrates to HMRC that the company has good governance and controls in place to monitor the reporting, which will reduce their risk rating by HMRC and benefit the company.  
  • Social security risk – An appendix 4 agreement covers the tax obligations only, social security risk still remains.  

Specialist STBV support from PKF Smith Cooper

Our employment tax specialists can help you obtain a Short-term Business Visitors agreement with HMRC and provide comprehensive support for your annual reporting obligations. Get in touch today to find out more about our services.