As we approach the end of the UK tax year reporting cycle, it’s crucial for employers to ensure compliance with their Short-Term Business Visitor (STBV) obligations. The deadline for submitting the annual PAYE special arrangement report for STBVs is 31 May 2025—and that clock is ticking. If you haven’t tackled this yet, we’re here to help.
STBVs and PAYE: The Basics
Short-term business visitors (STBVs) are individuals who aren’t UK tax residents but make business trips to the UK.
For UK employers, the PAYE (Pay As You Earn) system is strict when it comes to STBVs. If an employee from an overseas parent, subsidiary, or associated company works in the UK – whether on an ad-hoc basis or as part of a planned project – PAYE must be operated from day one. There’s no de-minimis limit, meaning tax obligations kick in immediately unless an easement is agreed.
PAYE Easements for STBVs
Appendix 4: Short-Term Business Visitor Agreement
HMRC introduced Appendix 4 as an administrative easement for STBVs. If an individual comes from a country with which the UK has a Double Taxation Agreement (DTA) and meets treaty conditions, PAYE obligations can be relaxed. However, to apply this easement, businesses must:
- Enter into an agreement with HMRC.
- Annually report business visitors by 31 May following the tax year.
- Verify that treaty conditions are met.
Ongoing tracking of business visitors is required to ensure compliance. We can support both the application and submission of reports as needed.
Appendix 8: Alternative PAYE Easement
For employees not from a DTA country or where the UK is their legal employer (e.g., employed overseas by a UK company’s branch), PAYE is still due. However, under an Appendix 8 agreement, HMRC allows:
- An annual payroll submission in May for employees spending 60 days or less in the UK.
- The UK company to settle tax on behalf of the employee.
- Gross-up calculations only on benefits-in-kind (not salary).
- No need for self-assessment.
To operate this system, businesses need a special PAYE reference. We can support both the application and submission of payroll information as needed.
What About Non-Resident Directors?
While there are some PAYE easements for employees, these typically don’t extend to statutory directors of UK companies visiting for work (e.g., attending board meetings). UK tax applies to income from UK workdays, and HMRC expects payroll withholdings. While non-resident directors may receive a personal allowance, it’s case-dependent. Payments shouldn’t be made gross without a documented rationale, and we can assist with director withholding if needed. Taxation of expenses provided for travel to the UK will also need to be considered.
How Cooper Parry Can Help
Navigating HMRC’s rules on STBVs can be a headache. Our services include:
- Advice on tracking and reporting for Appendix 4/STBV Agreements and Appendix 8 payrolls.
- Applying for Appendix 4 and Appendix 8 agreements.
- Assistance with Appendix 4 compliance submissions at year-end.
- Help with payroll calculations for Appendix 8 employees.
- Help with non-resident directors, including UK payroll compliance and reporting.
With the 31 May deadline approaching for STBVs, now’s the time to get everything in order. If you need expert guidance, Cooper Parry has got you covered. Get in touch today to allow time to finalise your position.
