Vortex 6
Vortex 6 is building a successful business both here in the UK and overseas. Currency fluctuations aside, operating overseas is not without its problems and Peter Olive will need to give consideration to the following.
Before sending any employees overseas for any length of time Vortex 6 should ensure they are compliant with the local immigration rules. Employees who spend six months or more overseas and in one country should be aware of the tax implications of that country. Vortex 6 may need to operate a payroll locally, paying relevant income and social security taxes. Consideration should also be given to how each element of employment income is taxable; the cost of living in some counties can be considerably higher than the UK and offering assistance to employees by way of housing assistance, moving and other living expenses may have tax implications. The tax position for individuals based overseas can be further complicated if that individual has personal sources of income or wealth in addition to their employment income.
Vortex 6 might, depending on its circumstances, have to consider establishing a branch or company in a country if an employee is spending six months or more in one country or if they open business premises overseas. There can be potential tax advantages to doing this, even if just one person is located in that country.
Locating staff overseas for long periods of time or establishing a branch or limited company is complex and has many tax implications. Vortex 6 and Peter Olive would be well advised to take advice when making such decisions.
Alex Peal, Partner, James Cowper LLP
0118 9590261 or email apeal@jamescowper.co.uk
January 2011