As part of its efforts to close the ‘tax gap’ — the difference between the tax theoretically due and the amount actually collected — the UK tax authority (HMRC) has begun publishing Guidelines for Compliance (GfC) across different areas of tax (read more about GfC here). The guidelines describe the processes that HMRC considers appropriate for businesses and individuals to collect, record, verify and disclose tax data in Paye As You Earn (PAYE), income tax and National Insurance Contributions (NIC) returns and other filings. Although intended to help taxpayers manage compliance, the GfCs also establish a benchmark that HMRC officers may use when assessing whether tax obligations have been met.
On 13 August 2026, HMRC published “Guidelines for Compliance on Short-Term Business Visitors” (GfC19), setting out the processes and records it expects employers with overseas visitors to maintain. Although much of the guidance reflects existing practice, GfC19 gives employers a clearer benchmark for demonstrating compliance. Employers should therefore review their visitor-tracking processes, recordkeeping and historic reporting to identify and address any gaps.
The guidelines in GfC19 are primarily intended for UK employers with overseas employees performing duties in the UK on a short-term basis. These overseas employees are commonly referred to as short-term business visitors (STBV).
Depending on the type of STBV agreement in place, employers hosting STBVs in the UK may be required to submit an annual report to HMRC by 31 May following the end of the relevant tax year, which ends on 5 April.
GfC19 clarifies HMRC’s expectations for STBV reporting. In particular, it:
HMRC has clarified the minimum level of tracking, stating that they “expect that employees will periodically report days spent in the UK on business to whoever is controlling the arrangement, and should not spends more than 30 days intermittently in the UK in any 12-month period without reporting to that central point.”
HMRC may conduct a compliance check at any time. It is likely to raise questions if an employer has inadequate systems for monitoring STBVs, does not retain sufficient records or cannot demonstrate that the relevant double tax agreement conditions were fulfilled in situations where PAYE was not operated.
Recordkeeping for STBVs
Employers must retain PAYE records for at least three years after the end of the relevant tax year. For STBVs, records should include:
For employers with only occasional overseas visitors in a tax year, GfC19 states that the employer may consider asking employees to apply individually for a no-tax (NT) code.
An NT code does not eliminate the employer’s payroll obligations. The employer must include the overseas employee on payroll and comply with real-time information (RTI) reporting requirements, which may require it to obtain overseas payroll and deferred income, share-based payment and benefit data, convert the amounts into sterling and report them appropriately. Because full RTI compliance can be onerous for inbound, tax-equalised employees, HMRC provides concessions through the “Appendix 6” modified payroll scheme. When agreed with HMRC, a modified payroll scheme allows employers to “relax” the RTI regulations and instead operate UK payroll on a “best estimate” basis for tax-equalised individuals, with a self-assessment tax return filed at year-end to reconcile the final UK tax position for the relevant tax year.
Employees using an NT code also need to register for self-assessment and complete the additional pages for residence and foreign income and gains, which cannot be filed using HMRC’s free online service. As such, employees will need to either file paper returns or engage professional advisors to assist with the tax return submission.
In practice, an NT code can place a significant administrative burden on the employee while the employer remains responsible for meeting its PAYE obligations. An STBV agreement may, therefore, remain the more practical solution.
An STBV agreement may relax PAYE obligations in certain circumstances where an individual comes to the UK from a country with which the UK has a tax treaty, and the individual is not subject to UK tax under that treaty. If no STBV agreement or other relief is in place, the UK employer must generally operate PAYE from the employee’s first day of work in the UK; there is no de minimis threshold.
Correcting errors
HMRC expects GfC19 to prompt employers to revisit their historic reporting for overseas visitors and correct errors in current and earlier tax years. Reporting failures can result in additional tax, interest and possibly penalties.
Current year errors should be corrected through amended RTI submissions. For closed tax years, HMRC asks employers to make a voluntary disclosure explaining the errors and the tax due. Depending on the circumstances, an STBV disclosure may require a review of up to 12 years of records.
GfC19 confirms that HMRC expects employers to maintain robust visitor-tracking systems, accurate PAYE reporting and sufficient records for all UK visitors, including assignees, STBVs and nonresident directors. Employers should be prepared to demonstrate that appropriate processes are in place and that they operate effectively in practice, particularly in the event of an HMRC compliance review.
Important questions nevertheless remain. GfC19 does not address whether work performed by nonresident directors in connection with non-board UK duties may be covered by an Appendix 4 (STBV Agreement) or Appendix 8 (Annual PAYE Scheme) arrangement (two arrangements that can help employers manage their PAYE obligations with respect to STBV and reduce the administrative burden).
It also does not clarify an employer’s obligation to recover UK tax from employees under Appendix 8 where the employer has not settled PAYE on a grossed-up basis.
Employers should review affected individuals on a case-by-case basis, with input from a specialist tax adviser, as needed. They should confirm that appropriate visitor-tracking systems are in place, conduct in-year reviews to verify that visitors are reported correctly and determine the appropriate reporting mechanism for each visitor, whether an STBV agreement, an annual PAYE scheme or payroll reporting for nonresident directors.
Employers should also use the review to identify and correct any historic reporting errors and to document how GfC19 has been considered and applied. Acting now can help employers respond more effectively to future HMRC enquiries and reduce their exposure to additional tax, interest and penalties.
Daniel Lambert
BDO in the UK
On 13 August 2026, HMRC published “Guidelines for Compliance on Short-Term Business Visitors” (GfC19), setting out the processes and records it expects employers with overseas visitors to maintain. Although much of the guidance reflects existing practice, GfC19 gives employers a clearer benchmark for demonstrating compliance. Employers should therefore review their visitor-tracking processes, recordkeeping and historic reporting to identify and address any gaps.
What You Need to Know
The guidelines in GfC19 are primarily intended for UK employers with overseas employees performing duties in the UK on a short-term basis. These overseas employees are commonly referred to as short-term business visitors (STBV).Depending on the type of STBV agreement in place, employers hosting STBVs in the UK may be required to submit an annual report to HMRC by 31 May following the end of the relevant tax year, which ends on 5 April.
GfC19 clarifies HMRC’s expectations for STBV reporting. In particular, it:
- Reiterates the generally accepted starting position that UK PAYE obligations can arise from the first day duties are performed in the UK unless a specific relaxation or exemption applies;
- Outlines the treatment of employees and nonresident directors from tax treaty and non-tax treaty countries;
- Explains the alternatives available to employers receiving overseas visitors in limited situations;
- Provides examples of questions HMRC may ask during an employer compliance check;
- Explains employers’ minimum recordkeeping obligations; and
- Provides guidance on correcting historic reporting errors of overseas visitors.
Summary of HMRC Expectations
HMRC has clarified the minimum level of tracking, stating that they “expect that employees will periodically report days spent in the UK on business to whoever is controlling the arrangement, and should not spends more than 30 days intermittently in the UK in any 12-month period without reporting to that central point.”HMRC may conduct a compliance check at any time. It is likely to raise questions if an employer has inadequate systems for monitoring STBVs, does not retain sufficient records or cannot demonstrate that the relevant double tax agreement conditions were fulfilled in situations where PAYE was not operated.
Recordkeeping for STBVs
Employers must retain PAYE records for at least three years after the end of the relevant tax year. For STBVs, records should include:
- The employment contract;
- The dates on which the overseas visitor worked in the UK and the nature of the duties performed;
- Details of bonuses, regardless of where they were paid;
- Details of participation in share schemes, including one-time share awards;
- Details of other benefits and allowances; and
- Documents supporting any decision that NIC is not due, potentially including certificates of continuing liability.
For employers with only occasional overseas visitors in a tax year, GfC19 states that the employer may consider asking employees to apply individually for a no-tax (NT) code.
An NT code does not eliminate the employer’s payroll obligations. The employer must include the overseas employee on payroll and comply with real-time information (RTI) reporting requirements, which may require it to obtain overseas payroll and deferred income, share-based payment and benefit data, convert the amounts into sterling and report them appropriately. Because full RTI compliance can be onerous for inbound, tax-equalised employees, HMRC provides concessions through the “Appendix 6” modified payroll scheme. When agreed with HMRC, a modified payroll scheme allows employers to “relax” the RTI regulations and instead operate UK payroll on a “best estimate” basis for tax-equalised individuals, with a self-assessment tax return filed at year-end to reconcile the final UK tax position for the relevant tax year.
Employees using an NT code also need to register for self-assessment and complete the additional pages for residence and foreign income and gains, which cannot be filed using HMRC’s free online service. As such, employees will need to either file paper returns or engage professional advisors to assist with the tax return submission.
In practice, an NT code can place a significant administrative burden on the employee while the employer remains responsible for meeting its PAYE obligations. An STBV agreement may, therefore, remain the more practical solution.
An STBV agreement may relax PAYE obligations in certain circumstances where an individual comes to the UK from a country with which the UK has a tax treaty, and the individual is not subject to UK tax under that treaty. If no STBV agreement or other relief is in place, the UK employer must generally operate PAYE from the employee’s first day of work in the UK; there is no de minimis threshold.
Correcting errors
HMRC expects GfC19 to prompt employers to revisit their historic reporting for overseas visitors and correct errors in current and earlier tax years. Reporting failures can result in additional tax, interest and possibly penalties.
Current year errors should be corrected through amended RTI submissions. For closed tax years, HMRC asks employers to make a voluntary disclosure explaining the errors and the tax due. Depending on the circumstances, an STBV disclosure may require a review of up to 12 years of records.
BDO Perspective
GfC19 confirms that HMRC expects employers to maintain robust visitor-tracking systems, accurate PAYE reporting and sufficient records for all UK visitors, including assignees, STBVs and nonresident directors. Employers should be prepared to demonstrate that appropriate processes are in place and that they operate effectively in practice, particularly in the event of an HMRC compliance review.Important questions nevertheless remain. GfC19 does not address whether work performed by nonresident directors in connection with non-board UK duties may be covered by an Appendix 4 (STBV Agreement) or Appendix 8 (Annual PAYE Scheme) arrangement (two arrangements that can help employers manage their PAYE obligations with respect to STBV and reduce the administrative burden).
It also does not clarify an employer’s obligation to recover UK tax from employees under Appendix 8 where the employer has not settled PAYE on a grossed-up basis.
Employers should review affected individuals on a case-by-case basis, with input from a specialist tax adviser, as needed. They should confirm that appropriate visitor-tracking systems are in place, conduct in-year reviews to verify that visitors are reported correctly and determine the appropriate reporting mechanism for each visitor, whether an STBV agreement, an annual PAYE scheme or payroll reporting for nonresident directors.
Employers should also use the review to identify and correct any historic reporting errors and to document how GfC19 has been considered and applied. Acting now can help employers respond more effectively to future HMRC enquiries and reduce their exposure to additional tax, interest and penalties.
Daniel Lambert
BDO in the UK