Repats on the up, compliance issues for HR

In the last two years there has been a significant increase in the number of ‘repats’, expatriates relocating out of Hong Kong and back to the UK. Ishali Patel, Senior Manager, Buzzacott—London based accounting firm commented, “In the last year, we’ve seen a 50% increase in the number of Hong-Kong-based British clients looking for tax advice to prepare for short-term and long-term relocation back to the UK.” She added, “Recently, there has been a lot more exchange of information between the two jurisdictions of HK and the UK—and HR needs to be mindful of tightening compliance issues surrounding staff who may be employed in Hong Kong, whilst residing overseas.”

Short-term business visitors to the UK who are employed overseas, but spending time living in the UK may still become subject to UK tax regulations depending on exactly how long they reside in the UK each time. It is therefore important for HR to keep track of such individuals’ travel arrangements so that they can stay compliant. Patel recommends seeking local advice to ascertain exactly what employer obligations are regarding provision of information for such mobile employees. In the UK, for example, if an employee’s duration of stay in UK is less than 30 days then only basic information is required. However, compliance requirements increase depending on the employee’s length of stay in the UK and after 183 continual days stay, they become a UK resident worldwide taxation applicable. In such cases significantly more information is required for compliance reporting including salary details, PAYE, withholding tax obligations in addition to the basic personal information about the employee. Patel advised HR, “Get local advice to ensure you understand each country’s compliance requirements and keep on top of which countries your staff are visiting and how long they are going to spend there.”