Many multinational businesses second employees from overseas group companies to the UK—whether to help launch a UK subsidiary, provide training, support a project, or fill a short-term staffing gap. These individuals often split their time between the UK and their home country.
This webpage is aimed at HR and Personnel Managers, as well as finance leads, who are responsible for managing the UK-side obligations when an employee comes to the UK on assignment.
A common and critical misconception is that a UK income tax or payroll obligation only arises if an employee spends more than 183 days in the UK. This is not correct. We strongly recommend the approach:
Assume UK tax obligations apply unless all exemption criteria are clearly met.
This principle applies to all jurisdictions—not just the UK.
To assess whether the UK has taxing rights, we refer to the double tax treaty between the UK and the employee’s home country. These treaties typically follow the OECD Model Treaty. The UK will only waive its taxing rights if all three of the following conditions are met:
This condition is widely misunderstood. It is not based solely on the UK tax year.
What this means in practice:
Example: For the UK tax year ending 5 April 2026, monitor the rolling 12-month periods from 6 April 2024 through to 5 April 2027.
This is the most frequently misunderstood condition.
What this means in practice: Many HR professionals assume that if the employee remains employed by the overseas parent company, this condition is met. However, we look beyond the legal contract and applies an economic employer test.
Even if the overseas company issues the payslip and employment contract, if:
Important: Even if costs are recharged indirectly (e.g. through management fees), the UK tax authorities – HM Revenue & Customs (HMRC) is likely to view the UK entity as bearing the cost.
This applies mainly where a group has a UK branch or project site that qualifies as a PE. If the employee works for such a UK presence, this exemption fails.
In our experience, most employees seconded to work in the UK fail at least one of the three exemption criteria—meaning the UK has taxing rights.
Once taxing rights arise:
Without a special agreement, PAYE must be operated on 100% of the salary—even if the employee also has overseas workdays.
However, an easement is available under Section 690 ITEPA 2003, which allows payroll tax to be applied only to UK workdays.
We help you:
UK and EU social security coordination rules continue to apply post-Brexit. An employee will normally remain liable to pay social security in their home country, as long as they hold an A1 certificate. This confirms that:
In most cases, the UK payroll acts as a shadow payroll. If the employee is tax equalised, further planning may be needed—visit our page on Tax Equalisation for more details.
If the employee is in the UK for less than 60 days, additional easements may apply—see our page on Short Term Business Visitors
We support multinational clients to:
You don’t have to figure this out alone—we work with HR and finance teams globally to ensure your assignments to the UK are managed correctly from day one.
Need help determining if your assignment triggers UK tax obligations? Get in touch. We’re here to help.
Senior Associate
Global Mobility, Personal Tax & VAT
Senior Manager
Head of Direct Taxes
