Managing tax risks for internationally mobile employees — 6 practical steps for employers

As businesses continue to expand across borders, the number of internationally mobile employees is steadily rising. Whether organisations are deploying staff to deliver projects, oversee operations or develop new markets, mobility brings clear commercial benefits — but it also introduces complex tax and social security considerations that need careful management.

Here, Tax Partner Euri Yoon and Tax Director Andrew Horsfield from our corporate tax advisory team outline the key UK tax issues that employers should be aware of when sending employees to work in the UK and highlight steps that organisations can take to stay compliant while maximising available reliefs.

Living accommodation — understanding the UK tax position

Providing accommodation is a common way to support employees during an international assignment. However, under UK tax law, employer‑provided living accommodation is normally treated as a taxable benefit.

Tax position

When an employer pays the rent and associated costs directly, these amounts are usually taxable on the employee and subject to employer Class 1A National Insurance Contributions (NICs). If the employer provides a cash allowance instead, the payment is treated as ordinary salary and taxed via Pay As You Earn (PAYE).

Temporary workplace relief

A valuable exemption exists where the employee is attending a temporary workplace, typically defined as an assignment expected to last no more than 24 months. If the conditions are met, accommodation (as well as travel and subsistence) can be provided free of tax.

Documenting the temporary nature of the assignment is essential to securing this relief.

Social security — where should contributions be paid?

International secondments often raise questions about whether the employee and employer should contribute to the UK National Insurance system or remain within the home country’s regime.

Detached worker rules

Under the UK-EU framework and similar bilateral arrangements, employees may remain within their home country social security system for up to 12 months with the possibility of a six-month extension. To rely on this exemption, employers must obtain a certificate of coverage (commonly known as an A1 certificate) from the home authority. Without this certificate, UK NICs are typically due from the outset.

Overseas Workday Relief — a potential opportunity

For employees who become UK tax resident for the first time in a number of years and continue to work partly outside the UK, Overseas Workday Relief (OWR) may offer significant tax advantages.

Under the current rules, qualifying employees may pay UK tax only on the portion of their income relating to UK workdays for up to four tax years — subject to certain caps and conditions.
OWR can be valuable for businesses with secondees who continue to perform duties in multiple jurisdictions.

Practical steps for employers

To navigate these rules effectively, employers should:

1. Plan assignments carefully and confirm duration and purpose early as this determines tax and NIC treatment.
2. Put clear documentation in place to help to demonstrate temporary status and allocate compliance responsibilities.
3. Secure social security certificates in advance to prevent unexpected UK NIC liabilities.
4. Structure accommodation support efficiently as direct employer payments are often more tax‑efficient than allowances.
5. Consider OWR.
6. Assess whether employees meet the conditions and plan their working patterns accordingly.

Talk to us

Supporting an internationally mobile workforce requires a combination of tax, employment and compliance expertise. 

We regularly advise organisations on:

• Structuring secondments and temporary assignments.
• UK tax and NIC implications for inbound or outbound employees.
• Drafting secondment and assignment documentation.
• PAYE, P11D and social security obligations.
• Reviewing global mobility policies.

If your organisation is planning or managing employee moves across borders, we provide clear, practical advice tailored to your circumstances.

Talk to us by calling 0333 004 4488, emailing hello@brabners.com or completing our contact form below.