Remote working has transformed the global employment landscape, offering businesses and employees unprecedented flexibility. The attraction of working from anywhere, coupled with the enticing proposition of hiring talent globally, has unlocked exciting new opportunities. However, this newfound flexibility comes with its own set of tax, legal, and compliance challenges.

Working from anywhere: Individual flexibility and corporate risks

The concept of working from anywhere sounds appealing, but it is far from simple in terms of managing compliance obligations. While remote work offers freedom, it also means businesses must navigate a complex web of immigration regulations, labour standards, and corporate risks.

When employees work remotely in foreign jurisdictions, businesses may create a ‘permanent establishment’, triggering corporate registration and tax liabilities. Other considerations include social security, income tax, and payroll regulations, which can vary significantly per country.

Although a ‘work from anywhere’ model is appealing, businesses should invest in up-front professional advice to understand tax compliance requirements arising in the overseas location as often, individual actions can bring about unexpected employer obligations.

Hiring from anywhere: Expanding talent pool, expanding complexity

Hiring from anywhere gives companies access to global talent without requiring physical relocation. However, to do so the employer must navigate the challenges of employment law, payroll tax and reporting requirements in the overseas location.  Overseas labour laws can impact employee benefits, working hours and termination rights unique to those applying in the UK.

Hiring an individual in an overseas territory can also bring about employer obligations such as payroll registration/withholding to account for income tax and social security liabilities.

Conclusion

To navigate these challenges and avoid potential financial/reputational risk exposure, employers should take a pro-active approach to global mobility tax planning. This includes mapping out where employees are working and understanding the tax and legal implications before the fact, by engaging with professional advisers to understand and address compliance risks.

For more advice on global mobility, please do contact me at tom.harrison@jcca.co.uk.