[Tax Corner] Brexit latest for employers

The UK ceased to be a member of the European Union on January 31, 2020, and has entered a transitional phase which will last until the end of this year. During this transition period, the UK continues to apply EU law, continues to be a member of the single market for goods and services, and the customs union, as well as allowing the free movement of people. Robert Salter from Blick Rothenberg breaks down the key issues for employers to address. 

Employers should now consider several issues with regard to their mobile employees - whether UK individuals working in Europe or EU/EEA employees working in the UK. Specific steps in this regard include:

UK employees in Europe

You need to ensure that your UK employees in Europe are informed of the issues that arise for them including: 

• The EU Settlement Scheme and local country rules (for British citizens already living in the EU);

• The limitations of the EU's proposed "temporary leave to remain" arrangements.

• Assess the impact of Brexit on existing and planned assignments:

For example, is there any value in bringing the start of planned assignments forward - i.e. so that they start before the 31st December 2020? This should, for example, help ensure assignees (whether to the UK or from the UK to the EU / EEA) have existing working rights in that other location without the need to obtain visas/work permits etc.

Additional issues

Will EU citizens presently in the UK lose their ongoing UK residency rights by accepting an overseas assignment? Would it be possible to restructure any planned assignments, by reducing the length of the assignment, for example, so that indefinite leave to remain rights in the UK are retained?

Is it worthwhile ending existing assignments (e.g. for UK individuals who have been living in other EU/EEA states before their international assignments) before December 31? Otherwise, would individuals in this situation lose their rights to return to their home country from an employment perspective? Companies will need to consider the policies of individual EU/EEA countries in this regard.

What about the UK residency status of those EU citizens with a UK employment contract who are already on assignment's overseas? Again, could it be appropriate to try to end their assignments before December 31, so that they can return to the UK without any issues? In this regard, one should note that EU citizens with a UK permanent right to remain status would typically lose that status if they are overseas on assignment for a period of more than 2 years.

Short-term business visitors

In practice, one would hope that even with a no-deal Brexit little paperwork would be required with regards to genuine business trips - whether that is for UK employees going to the EU or EU employees coming to the UK. However, employers should ensure that they understand in advance the nature of any planned business trips and recognize the difference between:

• Legitimate business trips - i.e. something which should not require a work permit or visa;

• Individuals undertaking work in the other jurisdictions and hence subject to what might be a lengthy and expensive visa application process. The costs (time delays and additional financial outlay) should be closely considered by businesses when budgeting for new projects, for example.

Act now

Whilst companies of all sizes (and in particular SMEs) have often delayed making pro-active plans in respect to Brexit, it is important that action is taken now. Given the uncertainties that exist in this regard about exactly what any formal agreement/position will look like and the fact that the December 31 deadline will rapidly approach, it is important for companies to now proactively review their options and next steps in this regard.

The risks of continuing to wait could result in significant issues for employees (which may be expensive and time-consuming to resolve) and hence represent a real threat to their employers and the relevant HR teams.

Source: Robert Salter at Blick Rothenberg 

The UK ceased to be a member of the European Union on January 31, 2020, and has entered a transitional phase which will last until the end of this year. During this transition period, the UK continues to apply EU law, continues to be a member of the single market for goods and services, and the customs union, as well as allowing the free movement of people. Robert Salter from Blick Rothenberg breaks down the key issues for employers to address. 

Employers should now consider several issues with regard to their mobile employees - whether UK individuals working in Europe or EU/EEA employees working in the UK. Specific steps in this regard include:

UK employees in Europe

You need to ensure that your UK employees in Europe are informed of the issues that arise for them including: 

• The EU Settlement Scheme and local country rules (for British citizens already living in the EU);

• The limitations of the EU's proposed "temporary leave to remain" arrangements.

• Assess the impact of Brexit on existing and planned assignments:

For example, is there any value in bringing the start of planned assignments forward - i.e. so that they start before the 31st December 2020? This should, for example, help ensure assignees (whether to the UK or from the UK to the EU / EEA) have existing working rights in that other location without the need to obtain visas/work permits etc.

Additional issues

Will EU citizens presently in the UK lose their ongoing UK residency rights by accepting an overseas assignment? Would it be possible to restructure any planned assignments, by reducing the length of the assignment, for example, so that indefinite leave to remain rights in the UK are retained?

Is it worthwhile ending existing assignments (e.g. for UK individuals who have been living in other EU/EEA states before their international assignments) before December 31? Otherwise, would individuals in this situation lose their rights to return to their home country from an employment perspective? Companies will need to consider the policies of individual EU/EEA countries in this regard.

What about the UK residency status of those EU citizens with a UK employment contract who are already on assignment's overseas? Again, could it be appropriate to try to end their assignments before December 31, so that they can return to the UK without any issues? In this regard, one should note that EU citizens with a UK permanent right to remain status would typically lose that status if they are overseas on assignment for a period of more than 2 years.

Short-term business visitors

In practice, one would hope that even with a no-deal Brexit little paperwork would be required with regards to genuine business trips - whether that is for UK employees going to the EU or EU employees coming to the UK. However, employers should ensure that they understand in advance the nature of any planned business trips and recognize the difference between:

• Legitimate business trips - i.e. something which should not require a work permit or visa;

• Individuals undertaking work in the other jurisdictions and hence subject to what might be a lengthy and expensive visa application process. The costs (time delays and additional financial outlay) should be closely considered by businesses when budgeting for new projects, for example.

Act now

Whilst companies of all sizes (and in particular SMEs) have often delayed making pro-active plans in respect to Brexit, it is important that action is taken now. Given the uncertainties that exist in this regard about exactly what any formal agreement/position will look like and the fact that the December 31 deadline will rapidly approach, it is important for companies to now proactively review their options and next steps in this regard.

The risks of continuing to wait could result in significant issues for employees (which may be expensive and time-consuming to resolve) and hence represent a real threat to their employers and the relevant HR teams.

Source: Robert Salter at Blick Rothenberg