The Short Term Business Visitor scheme (STBV) has changed with a reduction in the number of days a visitor can spend in the UK without recourse to HMRC. Individuals and employers need to be aware of the new rules to ensure they continue to access the valuable cash flow benefits offered under this

With the introduction of the new statutory residence test HMRC have needed to revise the STBV arrangement. The STBV regime (also known as Appendix 4 agreements) allows the relaxation of the PAYE obligations and reporting requirements for business visitors to the UK.

The scheme allows advance relief where a business visitor would be exempt from UK tax on their income under a double tax agreement. Generally, this is available where someone is employed overseas, is in the UK for less than 183 days in 12 months (or tax year depending on the agreement) and the employment cost is not borne by a UK company, branch or office.

In return for the relaxation of PAYE the employer must make an annual return of specified information by 31 May after the end of the tax year. The amount of information required varies depending on the time spent in the UK. The STBV scheme has only been available to employees who have not become resident in the UK.

The introduction of the new statutory residence test makes it more likely that someone will be regarded as resident in the UK whilst at the same time still be able to take advantage of relief under a double tax treaty. The amended arrangement will make it possible for a dual resident individual to be included within the scheme provided they would be treaty resident in the overseas country. There are also changes to the reporting categories with the 90-183 day
category being split into 90-150 days and 151-183 days.

A separate application is required for any individual who is expected to fall into the 151-183 day category stating why they believe they remain treaty resident overseas. This must be made as soon as it is anticipated that they will be in the UK for more than 150 days. Some of the other reporting requirements have been amended slightly to reflect the new residence test.

Employers who have an existing STBV scheme in place will be sent a copy of the revised wording. A new application will not be necessary but procedures should be reviewed to ensure that employers will collect the required information and identify any employees that will fall into the 151-183 day category.

HMRC have suggested that the changes to the residence rules and the increased
dependence on the double tax treaties for exemption will make matters more complex for employers and have indicated that more focus will be placed on business visitors during PAYE audits where no STBV agreement is in place.

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