OTS publishes a scoping note detailing planned Call for Evidence

29 July 2022

The Office of Tax Simplification (OTS) has released a scoping note detailing areas of interest for an upcoming Call for Evidence.

The request will centre on hybrid and distance working, and related trends emerging in the UK labour market. OTS will look for high-level evidence on hybrid and remote working, if it is likely to increase in popularity, trends involving working overseas and any tax complexities involved in these areas.

The policy paper identifies the scope of the review as:

  • be a high-level evidential review of the extent to which hybrid and distance working is likely to increase, whether this trend involves more overseas working, and whether the changes in working practices give rise to any new problems or challenges for employer and employee compliance
  • bring together relevant research in this area to present a view of the trends
  • conduct research to understand how employers and their policies and procedures are changing
  • consider employees normally based in the UK spending time working overseas and overseas employees spending time working in the UK. This includes considering at what the point the UK could/should consider taxing those individuals
  • identify ways in which developments in remote working may make complying with the tax system more complicated, and potential considerations for government in policy and operational terms
  • identify opportunities these changes may offer to reconsider existing features of the tax system to make things simpler both for those directly affected and more widely
  • focus on income tax, national insurance and corporation tax
  • look at the perspectives of employers and employees
  • consider the trends in self-employed hybrid workers.

Specifically, the review will consider the tax impacts of:

  • working across international borders, including multiple countries
  • allocation of primary taxing rights, and need for double tax relief
  • taxation and social security where there are more than two countries involved
  • accommodation, travel, and other expenses including consideration of who will be paying for these and the relevant tax treatment. This will include considering whether permanent workplace rules are clear for these new working practices
  • short term business visitor rules, overseas workday relief rules and PAYE withholding considerations such as modified payroll
  • pension contributions and share schemes
  • the creation of permanent establishments for corporate tax
  • where relevant, the above as they apply to remote working within the UK.

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