Navigating PAYE for short-term business visitors to the UK

With the end of the UK tax year fast approaching on 5 April, businesses must address various reporting requirements. These include submitting 2025-26 short-term business visitors (STBV) reports to HMRC by 31 May 2026, if agreements are in place by 5 April 2026. Having STBV agreements (Appendix 4 or 8) with HMRC relaxes strict PAYE tax requirements, which can otherwise apply from day one of travel to the UK.

STBV compliance remains an important topic for UK businesses. It concerns corporate governance and risk, processes and controls, potential HMRC PAYE and Business Risk Reviews, and due diligence ahead of transactions. The recent implementation of the electronic travel authorisation (ETA) system now provides UK authorities with more travel data, potentially prompting HMRC to raise questions regarding STBV compliance going forward.

Compliance requirements for short-term business visitors 

When an overseas employee from a group company visits the UK for business, there may be a PAYE obligation if the employee is viewed as working for the UK business and performing substantive duties. This applies even if the income from UK workdays is ultimately exempt under a double taxation treaty between the UK and the individual's country of residence.

Treaty exemptions generally apply when an employee:

• is tax resident overseas
• spends less than 183 days in the UK within a 12-month period
• the UK business doesn't bear the employment costs and doesn't function as the economic employer (based upon the substance of the relationship and who bears the risks and responsibilities associated with the employee’s work)

UK businesses can seek relaxation of PAYE requirements by obtaining an Appendix 4 STBV agreement. To benefit from this, they must agree to track and report STBVs to HMRC by 31 May each year. The amount of time spent in the UK dictates the employee information required for inclusion in the annual report.

Although employment costs must not ultimately be borne in the UK in order to qualify for an Appendix 4 agreement, HMRC has a 60-day rule concession. This means individuals can still qualify for STBV treatment where costs are borne in the UK if:

• they spend less than 60 days in the UK during the tax year
• those days do not form part of a more substantive period
• they are not considered as sufficiently integrated into the UK business.

If an exemption under a double taxation treaty isn't applicable – for example, where an individual is employed by an overseas branch of a UK company, or resident in a country where there is no tax treaty with the UK – then an Appendix 8 STBV PAYE special arrangement may be relevant. This allows for annual PAYE tax reporting to HMRC by 31 May each year for STBVs with 60 UK workdays or fewer during the tax year.

Exceptions to HMRC STBV agreements

Individuals can only be included in an Appendix 8 agreement if they don't have a Class 1 UK National Insurance liability. An Appendix 4 agreement is only for tax; the National Insurance position must be separately considered. Typically, individuals from countries with social security agreements with the UK for example, will remain liable for social security in their home country.

Non-UK resident directors of UK companies can't be included in an Appendix 8 agreement; in the main, this also applies for Appendix 4 agreements.

Additionally, UK employees may only be included in an Appendix 4 agreement if economically employed overseas.

If an individual isn't working for the UK business when visiting the UK, it's vital to consider whether the overseas employer has a taxable presence in the UK in order to establish if a PAYE obligation arises.

Next steps to manage STBV reporting requirements

While this overview addresses UK STBV compliance, tracking business travellers globally is essential to manage potential reporting requirements and liabilities.

A range of solutions and support is available to help you with this, including:

• reviewing your business traveller processes
• making applications for STBV agreements
• submitting annual STBV filings and regularising prior years
• providing a technology solution for workflow approval and tracking globally
• working with you to develop or review policies, and supporting with their implementation and communication to the business.

For more insight and guidance, contact Davyd Fisher and Claire Avery.

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