Working from home, wherever that might be

If there is one positive to come out of the pandemic for employees, working from home is now a more common employment option.

There are distinct advantages to the remote working model for businesses and employees alike. Employers can reduce office space costs, and employees can reduce the time and money they would otherwise have spent travelling to and from work each day. Remote working has also opened the labour market up for both, with employers now able to recruit beyond those living or willing to relocate within a commutable distance of their operations. Employees who were previously unwilling or unable to commute to work each day, perhaps because of family commitments or health reasons, can also consider roles they would have previously rejected.

The change has also had unexpected consequences for the housing market. Over the past two years, the property market in rural areas has been particularly buoyant as people have rejected the bright lights and convenience to their workplaces that our cities and their suburbs provide. Instead, they have moved ‘out’ and set up homes and home offices in more rural locations.

However, some have taken the idea of remote working one step further. With nothing restricting them from doing their job beyond the need for a computer and internet connection, why would they not consider a move overseas to warmer climes, or somewhere with cheaper property and a better lifestyle that was previously just an “I might move there when I retire” dream?

And whilst at K Bater Consultancy we aren’t in the business of dashing people’s dreams of a life doing their UK job amongst the vineyards of Bordeaux, the mountains of the Alps, or by the sea in the Mediterranean, both employers and employees need to be aware that such a move can have potentially severe and expensive consequences for them both.

You see, remote working becomes much more complicated when you live in a different country to the one in which you are employed. It is not simply a case of “have a laptop, will travel.” Living and working abroad can trigger all sorts of taxation, social security, insurance, and legal consequences for both the employee and employer. These vary from country to country and need to be understood and addressed at the outset.

For example, even though an employee is a UK citizen, working for a UK employer, under a UK employment contract and getting paid for their work into a UK bank account, the fact that they are sitting at their desk in a different country can have various implications, including the possibility that they, or their employer, could become liable for additional taxes in their new home country.

As you might appreciate, little surrounding tax is ever straightforward. The rules differ from country to country and depend on several factors, including whether a country has tax treaties and agreements with the UK. It may also depend upon the person’s residency status, tax domicile and other factors which the super-wealthy might usually have to navigate, but you wouldn’t expect to have to overcome with most jobs. As a result, it’s easy to appreciate how an employee sitting at their desk in Barcelona, Brussels, or Berlin, whilst working for a UK company, could end up with tax issues that prove to be both time-consuming and expensive for them and their employer to unravel.

The potential issues surrounding a remote UK employee living and working overseas don’t stop with tax matters, though. Unless they have a work visa for the county they live and work in, they could breach immigration laws. An employee working abroad for a UK company, under a UK contract of employment, will also be subject to UK employment law which may conflict with labour laws in the country they are physically working. Other UK laws, including those surrounding data protection, and health and safety, may still apply to them. It is also possible that various business insurances an employer has in place could be invalidated because they have staff who are not based in the UK.

It may be that an employer is wholly supportive of their staff working wherever they like. After all, the pandemic showed many businesses that staff could work from home and still do their jobs effectively. Nonetheless, any employer with staff who have chosen to live overseas but still work for them remotely or who has staff that may wish to do so in the future would be wise to speak with K Bater Consultancy. Our experience in this area of human resources means we can advise how to facilitate this very modern approach to working without falling foul of the problems and pitfalls it can pose.

About K Bater Consultancy

K Bater Consultancy provides human resource support, advice, and solutions to small and medium-sized businesses throughout the UK.

Its founder and principal, Kelly Bater, has more than 20 years of experience advising and supporting small and medium-sized businesses with all aspects of human resource management, is a Member of the Chartered Institute of Personnel and Development and has a Post Graduate Diploma in HR Management.

To learn more about how K Bater Consultancy can help your business, call Kelly today on 07500 939255 or email at kelly@kbaterhr.com