Short-term business visitors (STBVs): A refresher

In the absence of an Appendix 4 or 8 arrangement with HMRC, PAYE withholding needs to be operated from the first substantive workday an STBV spends working in the UK. In practice, this means operating a monthly UK payroll for ad hoc business travellers, which can represent a significant cost and administrative burden to employers.

Using the Appendices 4 and 8 concessions can greatly reduce this burden. 

The Appendix 4 arrangement relaxes the strict PAYE requirements for employees on short term business trips to the UK, provided the following conditions are met:

• The employee is resident in a country with which the UK has a double taxation agreement (DTA) containing a “dependent personal services” or “income from employment” article
• The employee is coming to work in the UK for a UK company or the UK branch of an overseas company, or the employee is legally employed by a UK resident employer but economically employed by a separate non-resident entity
• The employee is expected to stay in the UK for 183 days or fewer in any twelve-month period

HMRC expects businesses to proactively monitor business travel during the tax year by implementing a robust tracking system that has the following minimum requirements:

• Employees will periodically report days spent in the UK on business to the central point controlling this arrangement
• Employees should not spend more than 30 days intermittently in the UK in any 12-month period without reporting to that central point

The level of reporting required depends on the number of days the employee spends in the UK in a UK tax year. The higher the day count, the more information needs to be reported to HMRC. For those who fall into the categories with the highest day counts, documentary evidence may also need to be obtained from an STBV’s home country’s tax authorities, including a certificate of residence.

Note, there are no requirements to fulfil for either the employer or employee for the “1-30 day” category, beyond being able to demonstrate that you have a tracking process in place.

Employers are required to submit their Appendix 4 report to HMRC annually by 31 May 2026.

Where STBVs are not eligible for the Appendix 4 agreement, the Appendix 8 concession may still provide some relief from monthly PAYE submissions. The Appendix 8 is most commonly used for STBVs from locations with which the UK does not have a DTA, and from overseas branches of a UK company.

For STBVs who have no more than 60 substantive UK workdays in a tax year, and who are not subject to Class 1 NIC, the Appendix 8 concession allows employers to account for UK PAYE on their employment income annually, instead of monthly.

The payroll submission is due to HMRC by 31 May 2026 and should include non-cash benefits (removing the need for separate P11D reporting) and, where appropriate, gross-ups for tax-equalised STBVs. Where eligible, the UK’s tax-free personal allowance should be factored into the STBV’s tax calculation. This may cover their UK taxable income for the period in full, resulting in no ultimate tax due to HMRC.

The Appendix 8 concession relates solely to UK PAYE and not national insurance. Employers must therefore separately assess whether Class 1 NICs are due. Where an STBV remains subject to social security in their home country, for example under an A1 certificate or equivalent, employers should retain documentary evidence and ensure payroll and HR systems are aligned.

HMRC’s expectation is that you have robust tracking and processes to identify those employees who are eligible for Appendix 4 reporting, those employees who should be taxable under the Appendix 8 payroll, and those who sit outside both appendices.

Consideration of the following is essential as you look to build and maintain a robust governance process: 

• Do you have overseas branches of the UK company or representative offices within your corporate structure?
• Have you reviewed whether all STBVs are coming to the UK from locations with which the UK has a DTA?
• What duties does the STBV perform in the UK, and are these incidental or substantive in nature?
• Who does the STBV report into while in the UK and do they remain economically employed outside the UK?
• Are any of the STBVs also directors of the UK company, and, if so, do they travel to the UK for the performance of board duties?
• Where do the STBV’s costs sit, and are any direct staff costs recharged to the UK company?
• Have you considered your social security position? The Appendix 4 and Appendix 8 arrangements relax your PAYE obligation; they do not manage any NI obligations

We were expecting the governance around tracking to become more complicated with HMRC’s update to the employer related securities (ERS) guidance, which stated the expectation that STBVs should be included on annual ERS returns. In a recent and very welcome announcement, HMRC has reverted to a pragmatic approach so STBVs who are not subject to taxation in the UK do not need to be reported on the ERS.

Some examples can illustrate common pitfalls related to STBV compliance:

Many businesses have historically relied on welcome logs at the office’s front desk to monitor the UK presence of STBVs, but this may not capture the full information needed for compliant reporting.

A day for Appendix 4 reporting purposes is “any part of a day” an STBV spends in the UK. Employers need to have visibility of all days that individuals spend in the UK, including non-working days and those on which an individual may not set foot in the office. Examples may include days on which the STBV works from a hotel before a lunchtime flight home or extension of a business trip by an employee with family in the UK to include a weekend or a holiday.

In the most extreme case, an STBV may inadvertently spend more than 183 days in the UK, thereby breaching one of the key DTA thresholds to claim relief in respect of their employment income. If an employee is no longer eligible for Appendix 4 reporting, they may trigger various obligations in the UK, including a payroll obligation. As such, a robust process to identify individuals before they exceed key thresholds is critical.

You may have individuals visiting the UK both in their capacity as an employee and as a statutory director of your UK business. These individuals may not be eligible for Appendix 4 reporting and will need to be assessed on a case-by-case basis.

HMRC considers statutory directors as office holders and the income relating to the directorship should be subject to PAYE and NI (if applicable), through UK payroll. Consideration also needs to be given to the taxation of travel and subsistence expenses.

Where a clear delineation of responsibilities and associated remuneration is documented (for example, through dual contracts), DTA relief may still be possible. However, it is important that your processes capture and assess these individuals appropriately to ensure compliance.

You may be expanding into locations outside the UK. You will need to consider how to report STBVs from these locations. As your business evolves, it is important to ensure you remain compliant.

A new entity overseas may initially be registered as a representative office or branch of the UK company. As Appendix 8 can only be used where an employee spends no more than 60 substantive workdays in the UK, it’s critical to assess whether any time spent working in the UK could be classified as incidental.

You may decide at a point in the future to incorporate your representative office or branch, and your STBVs may become eligible for Appendix 4 reporting. It’s important to review your corporate structure regularly to ensure it’s aligned with your STBV reporting. 
Where groups acquire or dispose of businesses throughout the year, consideration should be given as to whether acquired entities need to register one or more PAYE references under Appendix 4 for inclusion within the consolidated group submission. The group should consider whether any Appendix 4 or 8 requirements are removed following the disposal of an entity.

It is also important to record days correctly when STBVs are visiting more than one UK entity within the group under multiple Appendix 4 arrangements. The requirement is to report any part of day in the UK. As such, an STBV visiting the UK for a total of five days across two different businesses would need to report five days under each respective Appendix 4 agreement, albeit that the group may ultimately submit a consolidated group report to HMRC.

These considerations should be borne in mind as you complete your year-end filing obligations.

HMRC will seek assurances that your business has clearly documented tax policies and procedures alongside suitable tracking and reporting processes. At S&W, we can support you:

• We can critically review your current STBV monitoring processes, data systems and your current STBV population and travel pattern, to identify areas for improvement and immediate focus
• We can assess your arrangements to identify current and future risks and advise on risk mitigation. This includes implementing an end‑to‑end technology solution for tracking travel, flagging key risks ahead of time and automating downstream compliance
• We can support you with your annual compliance obligations including the preparation of your Appendix 4 report and submission to HMRC, support identifying and calculating the information required to be reported on your Appendix 8 payroll, and end-to-end operation of your Appendix 8 payroll

If you would like to discuss how any of the above could impact your business, please get in touch with your usual S&W contact or the contacts listed.

Approval code: NTEH7032610