Remote Working - are you sure of the impact on your business?
Impact of Remote Working
As we have entered a second national lockdown in the UK and other countries globally are maintaining their own domestic restrictions, it is imperative to consider what impact remote working may have on your business.
Remote working can be broadly described as an employee performing their working duties in a location other than their usual place of work (for example, working from home instead of their usual office environment).
Whilst the idea of remote working is not a new one, recent events have forced many businesses to embrace this method of working, often to the fullest extent possible. The COVID-19 pandemic has led to the closure of international borders and countrywide lockdowns and this has had a significant impact on all workforces, whether they were already globally mobile or have had to become so due to these restrictions.
Remote working from outside the UK
Employees that work remotely, but still within their own country, are unlikely to create any global compliance issues for their employer. However, employers that have employees working for them outside of the employee’s home country will need to look closely at how this affects their business.
For many jurisdictions, an employee working in a country will bring with it associated compliance obligations, and costs, for the employer. This may be in the form of:
- a requirement to register the employer as having a presence in that country
- the operation of tax and social security withholding
- or an assessment to determine whether the employee has created a Permanent Establishment (PE) for corporation tax purposes.
Whilst this may bring associated administrative expenses for your business, failure to address these local compliance obligations can lead to costly penalties and difficulty to resolve any historical issues.
Moreover, as each country tackles the COVID-19 pandemic in their own way, it does mean less consistency when considering mitigating circumstances. For example, one country may lift travel restrictions before another, so an employee may still not be able to return to their usual country for work purposes but the authority in the host country may no longer allow a relaxation of local employer compliance obligations.
The key initial thoughts for your business – so you can be sure of the impact - are therefore:
- Do you have employees working across borders? Are you satisfied you have considered all local employer compliance obligations and accounted for these costs?
- Are you sure you know where all your employees are working? The pandemic has led to many different working patterns that may not yet have been communicated to you by your employees.
- If you are considering implementing, or updating, a remote working policy, possibly following a request from your employees, are you comfortable you can track their working pattern for employer compliance purposes?
Find out more
At MHA MacIntyre Hudson our Human Capital Advisory team can help you navigate these issues and assist with tailoring a bespoke solution to meet the needs of your business.
If you would like to find out more about how we can help mitigate the impact of remote working on your organisation contact Global Mobility & Expatriate Tax Lead, Peter Abbott directly on:
T: +44 (0) 207 429 4135
Or alternatively complete our online enquiry form and a member of the team will be in touch.