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When the Institution has agreed an employee can carry out work or live overseas, there may be additional costs incurred by the employee directly in relation to their work pattern, such as (but not limited to):

  • Visa/work permit Applications
  • Travel (flights to/from the overseas location, home leave etc.)
  • Accommodation (such as dual accommodation costs due to split family)
  • Private Medical Insurance (where free state healthcare isn’t available in the overseas location)
  • Misc. relocation expenses (such as purchase of small incidental items, cancelling subscriptions, contracts, setting up a home office etc.)
  • Tax filing/reporting

The employee may also incur some additional hardship specifically linked to their work, due for example to the distance from family, conditions in the overseas location, language and cultural differences etc.

Where such costs or hardship will be incurred by the employee, consideration may be given by the Institution to reimburse the employee certain expenses or provide a cash allowance to compensate them for any hardship.

The type of package that is offered to the employee and the administrative arrangements that the University enters into, will ultimately depend on the;

  • justification for the overseas work (i.e personally motivated, critical research etc.);
  • value to the Institution;
  • funding available (for example through external funding), and the;
  • employee’s personal circumstances.

This document aims to provide guidance to Managers and Institutions on the typical expenses incurred when regularly travelling, working or living overseas with details on how/when these expenses should be reimbursed, or other cash allowance provided. 

Given the potential cost of reimbursing expenses or providing cash allowances, it is important that appropriate budgetary consideration is made when applying for a grant with an overseas working requirement or recruiting someone who lives overseas.

Please note, in addition to the cost for any expenses the Institution elects to reimburse, there may be unavoidable costs associated with any overseas work. These costs will also need to be funded by the Institution and may include:

  • Advice on the University’s legal obligations in relation to tax withholding and payment of social security (including any requirement to establish an overseas payroll)
  • Employment legislation advice (confirming applicable legislation, mandatory insurances etc.)
  • Payment of overseas employer social security contributions (if applicable)
  • Other mandatory/statutory employer contributions in the overseas location (such as local pension funds, workers insurance and accident insurance, if applicable).

For more information on costs associated with overseas assignments, please refer to the Global Mobility Policy.

Summary of Provisions

A summary of the possible provisions and when/why they would be provided is given below, with further details provided later in the subsequent sections.

No Additional Provision

Where the Institution has agreed to facilitate an overseas working pattern which is motivated by the employee for personal reasons (for example to reunite with family or accept another part-time position overseas), with little or no benefit of the overseas element to the Institution, the employee would normally be fully responsible for any costs associated with their overseas working or living pattern.  No additional financial support, specifically linked to this work, would normally be provided by the Institution.

Recommended Provisions

There are certain costs, such as the visa application and outward/return travel for which reimbursement is recommended, where the Institution’s budget or external funding allows, as these offer the minimal amount of support to enable to work to go ahead and ensure compliance and the employee’s safety. 

Supplementary Provisions

If the employee will be working on a project of strategic importance or benefit to the Institution but in doing so will be incurring dual or additional costs (in relation to tax, accommodation etc.), and where the Institution’s budget or external funding allows, some or all of the additional costs detailed in this section could be reimbursed, or a cash allowance (Mobility Premium) provided as compensation.

Please note that where the overseas working pattern formed part of the arrangements and duties associated with the individual’s contract of employment which they were aware of when accepting the position, the justification for any supplementary provision would be significantly reduced. 

Exceptional

Where an employee will be working on a project of strategic importance or benefit to the Institution and where it can be proved that there is very solid justification due to the nature of the overseas location and the employee’s personal circumstances, reimbursement of certain exceptional costs may be appropriate. 

Recommended Provisions

These costs are unavoidable, provide an important aspect of support to employee’s who are working overseas, and aim to ensure the employee’s compliance and safety.

Overseas Visa/Work permit expenses

Visa/work permit requirements will vary depending on the country concerned, the individual’s nationality and the type of work to be conducted.

The individual may feel comfortable contacting the relevant embassy or seeking advice on the visa/work permit application process. However, in some cases, where the application is particularly complex, they may require support from an external immigration agent. There will be costs associated with the visa application itself, and also with support for an external immigration agent, should this be sought.

It is recommended that the Institution should, in most cases, make provision to reimburse the cost of the visa/work permit, e.g. through the research grant funding the project.  If the application is particularly complex, the Institution should also consider contributing towards the cost of external immigration expertise.

However, where the relocation is motivated by the employee for personal reasons or to allow them to accept another position overseas they would normally be fully liable for all visa related costs.

Outward and Return Travel

Travel to and from the overseas location should be booked through the University travel provider, currently Key Travel.  This gives visibility of where employees are, which in turn enables the University to fulfil its duty of care responsibilities to ensure the employee’s safety and wellbeing.  Booking travel through Key Travel also provides accountability on what is being spent across the University on travel.

Key Travel has a 24-hour emergency response team support to assist employees who experience any disruption or emergencies whilst traveling.

Bookings through Key Travel can be made by a registered booker, normally the Institutional Administrator.  Full details on how to register as a booker can be found on the Travel services website.

The Manager can speak to the University travel provider for assistance in determining a suitable maximum budget for the agreed class of travel, although if there are funder restrictions then these need to be observed. 

The agreed travel budget cannot be exchanged for cash or used to travel to any destination other than to/from the overseas location.

 

Supplementary Provisions

Reimbursement or provision of these allowances would normally only be provided for large strategic projects or where there was specific funding allocated for this purpose. These provisions aim to reduce the financial burden on the employee where they incur dual costs, or face significant additional costs or hardship directly as a result of their overseas work. 

Accommodation

The Institution may wish to fund accommodation in the overseas location, if the overseas work is for a short period(s) only (for example projects which require the employee to work for a month at a time overseas with the majority of the work still carried out in the UK), or if the employee’s family are unable to accompany them to the overseas location (for example for security or schooling reasons), thus resulting in dual accommodation costs. 

A budget for accommodation in the overseas location would normally be established further to advice either from a third party in the overseas location (such as a Host Institution / University) or the employee, subject to available external funding or the Institution’s budget.

If the employee rents a property costing more than the agreed limit, they would be expected to cover the excess.  If the employee finds a property for less than the target value, they would not receive the difference in cash or kind. 

If accommodation costs are supported, these will only be funded for the period it has been agreed the employee will work overseas, so the duration of the lease should reflect those dates.

It must be made clear that the University will not be responsible for the cost of any damage to any funded accommodation.

Consideration will need to be given to the most suitable accommodation option, based on:

  • local pricing
  • availability of options
  • length of the time overseas
  • administration involved in renting
  • the personal preference of the employee

Hotels: Preferential rates should be negotiated for long stays especially if multiple rooms are required.

Serviced apartments: More spacious than a hotel, normally including a kitchenette and seating area but with some hotel services, such as cleaning, linen etc.

Rental property: The lease for private rentals would normally be established in the employee’s name, however it may also be entered in to by the Institution or other third party involved in the project. Furnished accommodation is recommended in most cases to avoid the requirement to rent, ship or purchase furniture at an additional cost.

Rental property for multiple occupancy: Where several staff are working in one country, it may be helpful for the Institution to rent a larger apartment for them to stay in, either at the same time or on a rotational basis.  Such an arrangement may be more cost efficient than taking out multiple rentals. The appropriateness of this option would depend on the timing of visits and the particular requirements of the project.

Private Medical/Health Insurance

It is important to consider the health and wellbeing of the employee who will be working overseas. In certain countries, there is no free health care provision, or the state funded healthcare provision may be inadequate. Therefore, the Institution may wish to fund private medical insurance suitable for the overseas location.   

The employee may be able to arrange their own private medical insurance, which would then be reimbursed by the Institution.  Alternatively, and only if the employee is not able to arrange insurance themselves, the Insurance Section may be able to insure the individual through the University’s International Group Healthcare Scheme, the costs for which would be charged to the Institution.

Relocation Expenses

Relocation expenses are a range of miscellaneous outgoings directly associated with working / relocating overseas e.g. home office equipment, school uniforms, luggage, small electrical items, club subscriptions, post redirection, home furnishings, essential items of domestic equipment etc.

The maximum budget for relocation expenses should be determined by the manager, with reference to the budget available and discussion with the employee about the expected relocation costs.

Relocation expenses could either be reimbursed as a cash lump sum through payroll, or as itemised expenses up to the agreed limit.  Any cash payment should be processed through payroll as a gross sum (subject to tax and Ni as appropriate) and would be non-pensionable.

The employee will be responsible for settling any tax which may become due on the relocation expenses, either at home or the overseas location.

Tax Assistance

The employee is legally responsible for ensuring that their tax affairs remain compliant in both their home country and the overseas location.

The Institution will need to fund some initial tax advice to establish the University’s legal obligations in relation to tax withholding and social security payments in the overseas location.  The cost of such advice is unavoidable in most cases.

If the employee’s tax affairs become particularly complex (i.e. there is a requirement to work in multiple countries or the employee will be subject to double taxation), the Institution may also consider funding tax briefings and / or assistance with filing end of year tax returns through an external  tax specialist.

Although the University may facilitate the payment of income tax in the overseas location through establishment of an overseas payroll, funding the overseas tax itself would not normally be supported. However, where the employee is required to pay tax in two jurisdictions initially, there may be justification for the University to pay the overseas liability as an advance or loan, pending a tax refund in the home location upon submission of end of year tax returns.  This may happen, for example, where an employee does not break their home country tax residency, so remains liable to tax in their home country but also creates a tax liability overseas.  In this event, when the employee receives their tax refund, the advance is fully repaid to the University.

Mobility Premium

Local conditions, such as the infrastructure, environment, politics, culture, religion or the availability of goods and services in the overseas location may require some adjustment, or cause some hardship for the employee.

The cost of living in the overseas location may also be higher than in the UK, meaning the employee’s net pay does not go as far (the Global Mobility Co-ordinator can advise on any cost of living difference).

Where considered necessary, a Mobility Premium could be paid to the employee, either as a one-off payment or monthly payment for the duration of their time overseas.

The Mobility Premium could either be an agreed value or calculated as a percentage of gross salary, guidance on which can be provided by the Global Mobility Co-ordinator. 

Any Mobility Premium should be paid through payroll as a gross sum (subject to tax and social security deductions as appropriate) and would be non-pensionable. The employee will be responsible for settling any tax which may become due on the Mobility Premium, either at home or the overseas location.

 

Exceptional Provisions

Home Search

In overseas locations unfamiliar to the employee and the University and where there is no Host Institute/Organisation to advise, it may be appropriate to engage a local relocation agent to assist the employee in finding suitable accommodation in the overseas location.  Two days would normally be appropriate for this service.  As well as accompanying the employee on property viewings, the relocation agent will also negotiate and set up the lease and assist the employee in setting up services for utilities.

The home search agent could also provide settling-in support, for example to assist with opening bank accounts, obtaining drivers licences etc., if required.  For large projects with multiple relocations, this service could be provided a group session.

Utilities and Property Charges

Where the employee is maintaining a property in the home country as well as overseas, for example because their family is not able to relocate (for security or schooling reasons), the Institution may consider reimbursing additional property charges such as council tax (or equivalent property tax), utility bills, concierge or cleaning charges, home contents insurance and rental agency charges in the overseas location.

Note: The University would not cover the cost of any deposits due to secure a property overseas, as this deposit would be returned to them at the end of the lease agreement.

Home Leave Travel

Home leave enables the employee to return home on holiday to visit family and friends, secure medical and dental care and carry out personal business.  Home leave may be more relevant where the employee is based in a location with a level of particular hardship and where they are working overseas without their family.

Should the Institution wish to fund home leave travel, as with Outward and Return Travel, travel should be booked through the University’s provider travel provider, currently Key Travel.

Only the cost of travel to and from the employee’s home country would normally be supported.  Funding of transport and subsistence whilst at home would not be supported and annual leave will need to be booked in accordance with normal practice for the duration of the home leave.

 

Payment of Expenses and Allowances

Provision of any cash allowance or benefit in kind is likely to be considered taxable and the employee would be responsible for settling that tax, either in their home country, the overseas location, or both. They should be advised to speak to their personal tax adviser to discuss the implications this may have on the net value of the benefit.

All cash allowances (the Mobility Premium or relocation expenses) or taxable expenses should be processed through payroll so that the appropriate tax and social security can be withheld at source.  Non-taxable expenses can be processed following the University expense claim process.