Staff choosing to work overseas - potential implications
The HEI’s recruitment and retention strategy should be considered, to decide whether moves overseas are to be encouraged and, if so, for whom. Care should be taken about setting unwanted precedents.
The contract might require staff to live a certain distance from campus and/or to inform the HEI of any change of address.
USS is not an authorised cross border scheme and is prohibited from accepting contributions from an employer that has a member of staff that is subject to the social and labour laws relevant to the field of occupational pensions of an EEA state other than the UK.
UUK guidance issued last month said that the number one priority for keeping your overseas Intellectual Property secure is to know where your staff are.
If employees are not (and have not in the past) paid into the country’s social security system, they may not be able to access healthcare in that country. This can be especially costly.
If the employee is not a national of the country they are working in, they will need to have appropriate visas in place to allow working in that country. Countries have the right to expel an individual working without a proper visa.
Principle rule to remember is you pay where you work. If you are working overseas without checking the tax position or getting prior agreement that you can continue to pay social security in your home country, the host country is going to want their share. The 183 day rule is often a myth...
An employee working from an overseas ‘home’ may inadvertently cause their university to create a permanent establishment in that country. Every country has different rules, but the university will have to register in that country and likely pay corporate, sales and payroll taxes.
Following the end of the Brexit transition period on the 31 December 2020 EEA citizens will no longer have an automatic right to work and live in the UK (except Irish Citizens). EEA citizens resident in the UK prior to 31 December can apply for Settled or Pre-Settled status to maintain the right to work and live in the UK. Those EEA citizens arriving in the UK who have not been previously been resident after this date will need to apply for and obtain a Visa. There are charges associated with this as well as charges for the NHS Healthcare Surcharge.
If you have not applied for the EU Settlement Scheme because you have not been resident in the UK prior to 31 December, you must apply for and obtain a Visa. If you are academic or research staff, you may be able to apply for a Global Talent Visa – you can find further information here. If you do not meet the criteria for a Global Talent Visa you will need to apply for a Skilled Worker Visa. If you have been outside the UK for more than two years, even if you have Indefinite Leave to Remain, you may have to apply for a Returning Resident Visa. If you believe that you will require a visa to work in the UK please contact the HR team to discuss which route will be the most suitable for your personal circumstances.
In most cases, when we offered you employment, there was an agreement you would carry out the work in the UK and your contractual arrangement is based in the U.K. We recognise that during 2020 there have been many reasons why our staff wished to return to be with close family. Working overseas, however, can have many implications for the University and for you personally. It is a complex area that has legal, pension, tax, social security, insurance and residency implications. There will also be the requirement to have the right to work in the overseas country and there may be work visa implications. It is important that we assess all risks to the University and whilst we appreciate you may have good reason to want to remain overseas, it is likely as travel restrictions permit we will require staff to return to the UK.
If your only home is in the UK and you have owned, rented or lived in it for at least 91 days in total and you have spent at least 30 days there in the tax year then you will be resident in the UK for tax purposes. If you do not meet these criteria or you have not spent 183 days in the UK in the tax year, then you are non-resident for UK tax purposes.
If you have not been in the U.K for 183 days within a tax year, it is possible you will be non-resident for UK tax purposes (see Q3/4 above).
It is quite possible that your tax residency will have cost implications for the University by creating obligations to establish an overseas payroll, obtain non-standard insurance, and may also create a ‘permanent establishment’ resulting in overseas corporate and indirect tax charges.
If you are non-resident in the UK, tax due to the UK tax authority (HMRC) will be that relating to your UK income only. It may be possible to mitigate any double tax on this income if your country of residence has a double tax treaty with the UK. A double tax treaty is an agreement between 2 or more countries designed to protect against the risk of double taxation where the same income is taxable in both countries. The area of international tax is complex therefore financial advice is recommended.
To be a resident in the UK for tax purposes, you either:
- spend 183 days in the UK
- your only home is in the UK. You must have owned, rented or lived in it for at least 91 days in total and that you spent at least 30 days there in the tax year
Due to cross-border regulations, if you work in the European Economic Area (EEA) (EU countries plus Norway, Liechtenstein and Iceland) but are employed in the UK, the rules of the scheme prohibit USS from accepting contributions. There are exceptions to this if you are on a secondment basis.
If you live outside of the EEA, then you may be able to join USS if:
- your employer is based in the UK and your work is on behalf of them
- your UK employer continues to pay your contributions
- your secondment is only for a limited time
- you’re not a member of another pension scheme to which your employer contributes
If you have queries regarding this, please speak to the Strathclyde Pension team and HR who can seek further guidance on your particular situation.
If you are working regularly – more than 100 hours a year, it is likely you will have employed status. There are certain exceptions, for example:
- the work you do is for short periods of time (a week or two every few months)
- you work for less than 183 days a year
- you carry out specific tasks overseas as one-off activities (external examiner)
- there is no ongoing contractual relationship when you are not working (so you do not have continuity of service).
If you meet these conditions, it could be self-employment is more appropriate. This should be discussed with HR and Finance in the first instance.
We would advise you to investigate any obligations you may have for tax and social security or other contributions in your country of residence. It is advisable, once you have done so, to contact your Head of Department for them to speak to HR and their Finance Partner to obtain further guidance.
Any plans to leave the UK and work abroad must be explicitly approved by Finance and HR before travel is permitted. Guidance and a global mobility framework will be issued in due course, but in the meantime please liaise with your HR and Finance contacts who can communicate with the relevant parties.
The University would only pay for costs associated with a post that required you to work overseas for any period of time. If you move overseas for family or personal reasons the University is not able to help you with any costs or regulatory liabilities (such as social security) that you may incur.