Office of Tax Simplification launch review into hybrid and distance working

The Charity Tax Group have recently summarised the context of and the key issues to be covered by the Office of Tax Simplifications (OTS) upcoming review.

You don’t need to look far for evidence of the seismic change in working from home in the UK; people have come to expect more flexible working conditions, and businesses recognise that to retain and attract talent they need to offer that flexibility. With the drive to adapt to the changing market, and a breadth of regulations to consider, tax isn’t always the first thing on people’s minds when designing their policies.

Over forty jurisdictions across the world already offer ‘digital nomad’ visas to attract mobile workers, many of them aimed at a tax-free stay for the visitor. Even in the UK, rules and guidance around employee expenses, and concepts like permanent workplace, seem designed for traditional ways of working and may begin to feel stretched.

The OTS is looking for evidence of trends in relation to increasing numbers of people choosing to work in different ways, including across borders.

The review will also consider whether the tax and social security rules are flexible enough to cope with the changes to how and where people are working, and how businesses, advisors and other bodies are experiencing these changes.

Other key issues the review will cover include:

1. Working across international borders, and what that means for things like tax, social security, tax residence, and permanent establishment
2. How accommodation, travel, and other expenses work in a hybrid world, including who will pay and whether permanent workplace rules make sense
3. Application of short term business visitor rules, overseas workday relief, and modified payroll
4. The treatment and impact on pension contributions and share schemes
5. The risks or otherwise of creating permanent establishments or even changing corporate residence

OTS particularly want to speak to employers and employees across a range of sectors and sizes, and self-employed people who may spend part of their time working in another country.

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