United Kingdom: Office of Tax Simplification issues call for evidence on hybrid and distance working

Trends and chalenges

In brief

The Office of Tax Simplification (OTS) has issued a call for evidence from companies and individuals on remote working, including in another country. The OTS is reviewing recent trends in working patterns and the implications these can have on tax and the challenges it can bring. This is currently an important topic for companies as they try to balance employees' appetite for remote working with the tax and practical implications of doing so. Likewise, it is also moving up the agenda with tax authorities after any temporary leniencies at the beginning of the pandemic have ceased. The call for evidence can be found here.


Key takeaways

The OTS wishes to gather evidence to assess the extent of hybrid and remote working. The general assumption is that this is increasing, but they want to test whether this is borne out by the evidence and what companies are seeing in practice. They also want to assess whether this is mostly within the country of employment or cross-border.

  • This review will cover issues of income tax, social security, expenses/allowances, corporate residence and permanent establishment for companies.
  • Companies are able to provide written responses to questions and these should be submitted electronically to the OTS. The deadline for written responses is 25 November 2022.
  • Alternatively, companies can arrange an online or in-person meeting with the OTS by emailing by 31 October 2022.
  • The OTS expects to publish its findings in early 2023.
  • Employees and the self-employed are invited to complete a survey with their experience.

In depth

The call for evidence covers the following topics:

  • Trends and data on hybrid and remote working, including cross-border working, but excluding traditional expat assignments. The OTS wishes to understand any differences between the position pre-pandemic, during the pandemic, emerging from the pandemic and going forwards.
  • How companies' policies on remote and cross border working have changed over time.
  • The steps that companies have introduced to implement such policies, e.g., seeking advice, putting limits on their policies and tracking employees.
  • The extent of employee requests for remote working, both from existing employees and through recruitment.
  • For those employees working from home in the UK, what policies do companies have in place, particularly regarding expenses and allowances, and how have these changed over time.
  • The final section focuses on permanent establishment and corporate residence and the extent to which companies have considered this and whether they see it as a risk or opportunity. This is an important area for companies, but one with significant uncertainty.

The call for evidence can be found here. If you are responding on behalf of your company (or are thinking of doing so), please do reach out if you would like to discuss the responses prior to submission.

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