September 5, 2022
Hybrid working tax consultation announced by government adviser
The Office of Tax Simplification (OTS), an independent advisor to the UK government, has launched a review looking for evidence of trends in relation to hybrid working. The review will also consider whether the tax and social security rules are flexible enough to cope, and what businesses, advisors and other bodies are experiencing as new ways of working become business as usual. The review will also consider the implications of any developments on cross border workers.
According to the OTS, the review comes as people have come to expect more flexible working conditions and businesses are more willing to offer hybrid working as a way to attract and retain staff, increase productivity and cut costs. The call for evidence states that over forty jurisdictions already offer ‘digital nomad’ visas to attract mobile workers, many of them aimed at a tax-free stay for remote workers.
It claims that in the UK, the rules and guidance around employee expenses, and concepts like permanent workplace, ‘seem designed for traditional ways of working’ and may need to be updated to take account of ne work cultures.
Among other key issues that the review will cover include how accommodation, travel, and other expenses work in a hybrid working world, including who is responsible for payments and whether permanent workplace rules apply. It will also cover the application of short-term business visitor rules, overseas workday relief, and modified payroll, the treatment and impact on pension contributions and share schemes, and issues related residency.
The OTS adds that it will be mindful of likely implications of any recommendations for HMRC. It will also cover the role and contribution of financial advisers, employment law, the implications of changes in different regions and sectors of the economy as well as looking at international experiences, examples of best practice and the work of the OECD in this area.
The OTS says it is aiming to speak with employers and employees across a range of sectors and sizes, and self-employed or other workers who may spend part of their time working in another country.
