Business Travel: Key considerations for employers

When does a PAYE obligation arise?

The scene is familiar: an employee from overseas steps off a flight, scans their passport at an e-gate, and heads into a week of meetings in London. What feels like a routine business trip quietly generates a trail of biometric records, travel history and cross-referenced data points. For UK businesses, that simple journey can trigger a chain of tax and compliance obligations often long before anyone realises.

In recent years, global tax authorities have sharpened their focus on business travellers. What was once considered low risk ‘short term travel’ is now a compliance priority, reinforced by the UK’s new Electronic Travel Authorisation system. Transparency has increased; so has scrutiny. Organisations can no longer rely on outdated assumptions about when overseas visitors create UK liabilities.

A common misconception is that a Pay-As-You-Earn (PAYE) obligation does not arise when an employee pays tax elsewhere or because a Double Taxation Agreement (DTA) exists, but this is incorrect. The UK applies a day-one PAYE obligation when an overseas employee performs duties for the benefit of a UK business, even if the employee pays tax elsewhere or the UK holds a DTA with their home country. While a double taxation treaty may ultimately exempt a business visitor’s remuneration from UK tax, a PAYE obligation can still exist.

The STBVA safety net and why it’s not foolproof

The Short-Term Business Visitors Agreement (STBVA) with HMRC offers welcome relief, easing PAYE requirements for qualifying visitors. However, the agreement only works if a business meets strict criteria.

Before a UK business considers whether to include a business visitor on their STBVA reporting, the first question is whether a PAYE obligation even arises. If the business for whom the individual is working for in the UK has no UK PAYE presence or the employee is carrying out incidental duties in the UK (1) a PAYE obligation on the employer may not arise and no STBV reporting required.

Interpreting the data

Tracking UK days of presence and providing data to HMRC on an annual basis is not the totality of a UK business’s STBVA obligations. Travel data tells only part of the story. To understand compliance risk, organisations must examine deeper factors such as:

• corporate structure and visitor seniority
• nature of activities performed
• directorships on UK boards
• cost centre allocation
• who bears travel, accommodation, and subsistence costs

Recharging costs to the UK doesn't automatically exempt a visitor from STBVA inclusion, but it can signal ‘economic employment’. Senior visitors with expected UK patterns may be seen as integrated into the business and therefore not suitable for inclusion on a STBVA.

Permanent Establishment (PE): the hidden exposure

Even where there is a DTA between the territories, there can still be a risk of creating a corporation tax obligation (known as a taxable permanent establishment (PE)) where there is a repeated pattern of visits; their duties involve negotiating or concluding contracts; where roles are split across territories or they hold regional or a senior commercial role. Tax authorities often look to cross-reference travel and expenses data with the roles and responsibilities of visitors to the UK to understand whether a PE has been established. Where a PE has been established, this requires a transfer pricing analysis of the revenues and costs that should be allocated to that PE (to create taxable profit).

Other compliance considerations

Whether an organisation’s business visitors can be included on a STBVA or require a PAYE deduction is only part of the consideration. There are also social security, Posted Worker Directive, immigration, cyber security, and health and safety considerations, to name but a few.

From a UK National Insurance Contributions (NIC) perspective, it is often possible to treat a business visitor as exempt from UK NIC if a bilateral or multilateral social security agreement exists between the UK and the home country. This is the case for all EU countries, and major travel corridors e.g. the US and Canada. However, for this exemption to apply, the home country employer must strictly obtain a Certificate of Coverage/A1 which the UK business can retain on file for HMRC’s inspection. There are also a considerable number of countries with which the UK has no social security agreement – including India (expected ratification of the agreement Summer 2026), China and Australia. Visitors from these countries can, however, often be treated as exempt from UK NIC for up to 52 continuous weeks, so long as they do not have extensive personal connections to the UK and do not work regularly in the UK.

What about UK outbound business visitors?

Compliance risks also arise when UK employees travel overseas. When considering global business visitor obligations, we often start by reviewing high traffic lanes.  Increased border controls can mean increased visibility of global work patterns.

Quick guide for common high traffic lanes

India: For business visitors to India, any income for services performed in India is taxable, even for frequent short-term visitors staying under 183 days, regardless of visa type or where salary is paid. A Short Stay Exemption (SSE) may apply if physical presence is under 90 days, but it must be supported with strong documentation, including a tax residency certificate from another jurisdiction. Where taxable income after any treaty relief falls below the basic exemption limit, a tax return may not be required, though filing is often advisable to evidence the treaty claim and reduce future litigation risk. On social security, India has agreements with many countries (signed an agreement with the UK on 10 February 2026, expected ratification Summer 2026), but in the absence of a ratified agreement, Indian Provident Fund contributions may be due.

Germany: It’s often possible to exempt German inbound business visitors from German income tax and foreign employer reporting obligations, where the business visitor is from a DTA territory; has no ‘centre of vital interest’ in Germany; no economic or legal employer in Germany; and stays in Germany for less than 183 days. An exception being the headquarter principle (Stammhausprinzip) for employees of a foreign PE e.g. a branch, of a German headquartered entity, in which case German workdays are subject to tax and the headquarter has the obligation to operate a payroll and remit the German wage tax. From a social security perspective, Germany again has an extensive network of social security agreements, but not all of these cover all branches of the complex German social security system. 

Conclusion

As your business begins to interrogate business visitor data ahead of the 31 May STBVA reporting deadline, we can support you through the process. 

Our web-based business traveller tool, PinPoint, enables businesses to proactively identify and manage their exposure to international taxes, social security, posted worker directive and permanent establishment obligations. 

For further guidance on how PinPoint could work for your global business visitor population, get in touch to book a demo.

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