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Q. What is Global Mobility?

Global Mobility refers to the movement of individuals across national boundaries for the purposes of their work.  This movement can take many forms, from business travel, dual employment and paid leave to more formal overseas assignments under the Global Mobility Policy.  Please refer to the Global Mobility Decision Tree for more overseas working/living patterns.

The Global Mobility function within the Resourcing team in the HR Division is designed to assist with this movement of people, including planning and costing in advance of any relocation/recruitment.  The processes put in place by the Global Mobility function aim to raise awareness of tax, compliance, payroll and immigration concerns, as well as personal matters that may arise, thereby reducing the risk of financial or immigration penalties being incurred and protecting the University’s reputation whilst facilitating the movement of employees.

 

 

Q. What is an overseas assignment?

When an employee works or lives overseas for a period longer than 6 months (183 days) in any 12-month period whilst performing their appointed role for the University, this is called an overseas assignment.

Further information on processes and procedures applicable for overseas assignments can be found in the Global Mobility Policy.

Q. What types of overseas assignment are there?

There are four types of overseas assignment commonly used within the University.

Assignment Type

Description

Dual Country

Where an employee regularly carries out work on behalf of the University in the UK and one or more other country, such as: working overseas from Monday-Friday and returning to the UK at weekends, working a split week between the UK and another country, or for more extended periods such as working 3 weeks overseas and one week in the UK on a rotational basis

Temporary

A defined period of time working overseas, where the employee had been working for the University in the UK and intends to return to work for the University in the UK on the completion of their overseas assignment.  This includes fieldwork, Marie Sklodowska-Curie Global Fellowships, Sir Henry Wellcome Fellowships, sabbatical leave for more than two terms and overseas secondments.

Permanent

Permanent relocation of an existing UK based employee to live and work overseas.  The employee may maintain a full-time role for the University working remotely, or maintain a part-time role whilst also working part-time for an external organisation/institution overseas.

Overseas Recruitment

The recruitment of an individual based outside the UK who will continue to work overseas for the duration, or initial part of, their contract.

Please note that the normal recruitment process should be followed alongside the Assignment authorisation process, however it should be clearly indicated through web recruitment or on the CHRIS10 form that the role will be based overseas.

 

Q. Why is six months the maximum duration someone can work overseas without additional approval?

It is generally the case that working overseas should not result in foreign employment taxes if:

  • The employee is normally UK tax resident and works for the University in the UK, and
  • There is a double taxation agreement in place between the UK and the country in which they will be working, and
  • Their stay in that country is for less than 6 months over a 12 months period.

Therefore, if the employee is working overseas for less than 6 months they can usually continue to be paid through University’s UK payroll and the terms and conditions of their employment are not affected.  However there are some exceptions, notably for employees who are hired overseas, live overseas but work in the UK and employees who have another part-time employment overseas.  Please refer to the Global Mobility Decision tree for clarification on any actions required for shorter working patterns.

The list of countries with which there is a double taxation agreement is set out at:

https://www.gov.uk/government/collections/tax-treaties

Q. Why do overseas assignments need to be planned well in advance?

Careful consideration needs to be given to the strategic benefits to the Institution of sending the member of staff on an overseas assignment, the work that will be carried out and its duration, practical arrangements associated with the individual’s work in another country, such as establishment of an overseas payroll, and any relevant personal factors such as the member of staff’s health.  This process can take several months.

Please note that tax, social security and payroll arrangements cannot always be back-dated, so overseas work which proceeds without full and timely consideration could leave the Institution open to tax fines, late payment penalties and over-payment of USS contributions.

Q. If the Employee is responsible for settling their own taxes, why does the University need to be involved?

In many countries, tax and social security can only be paid to the authorities through a local payroll.  In these cases, the University would need to set up an overseas payroll, either through Cambridge University Press (CUP) or another external provider, to facilitate payment of tax for the employee.  There will also often be employer social security costs or compulsory insurance in the Assignment Country which must be arranged and settled by the University.

Q. If the Employee has a UK employment contract, why does it matter where they live?

Even if an individual is employed by the University to work in the UK, if their permanent residence is overseas they may continue to be liable to tax or social security in the overseas location.  For further information on these cases, please refer to the Global Mobility Decision tree, or contact the Global Mobility Co-ordinator.

Q. What costs should be budgeted for?

When the Institution agrees 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):

Ø  Visa/work permit Applications

Ø  Travel (flights to/from the overseas location, home leave etc.)

Ø  Accommodation (such as dual accommodation costs due to split family)

Ø  Private Medical Insurance (where free state healthcare isn’t available in the overseas location)

Ø  Misc. relocation expenses (such as purchase of small incidental items, cancelling subscriptions, contracts, setting up a home office etc.)

Ø  Tax filing/reporting

The Institution may consider reimbursing the employee for some or all of these costs, and further information can be found in the Global mobility: Expenses and Allowance guide.

 

In addition, for overseas assignments and other more complex working patterns, there may be unavoidable costs, which will also need to be funded by the Institution, such as (but not limited to):

Ø  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)

Ø  Employment legislation advice

Ø  Overseas employer social security contributions (if applicable)

Ø  Other mandatory/statutory employer contributions in the overseas location (such as local pension funds, workers insurance and accident insurance, if applicable)

It is estimated that the costs for initial tax and employment legislation advice, in straightforward cases, will be a minimum of £500 up to around £5,000 plus VAT, but will be greater for more complex cases.  Further costs may also then become due in setting up overseas payrolls, settling statutory payments overseas such as social security, insurance etc.   Confirmation of those costs will be given to the Institution once known.

Q. Can family members accompany on an overseas assignment?

Yes, family members can accompany the individual on overseas assignment.  However, it must be made clear to the HR Schools team that this is the intention as it may have an impact on the individual’s tax residency.  Thought should also be given as to whether the Assignment Location is suitable for families and whether there is adequate medical insurance in place to cover the accompanying family members.

Q. What steps should be taken if any overseas work or relocation is being considered?

The Head of Institution or Institutional Administrator should review the Manager's Guidance, the Global Mobility Decision Tree and the Global Mobility Policy.

They should also refer to the Risk Assessment guidance and let their HR Schools Team know as soon as possible.

Q. If the department agrees to an overseas assignment in principle, having reviewed all the guidance notes, what are the next steps?

The Institutional Administrator in liaison with the Line Manager, Research Grants Administrator and the member(s) of staff concerned should:

a)    Complete the Risk Assessment and send it to the Departmental Safety Officer for approval:

b)    Complete Section 1 of the Global Mobility Form: HR56

The HR56 should be agreed by the Head of Institution in principle before being sent to the relevant HR Schools team.

In line with an internal protocol that has been agreed with the relevant support services (including tax, legal, recruitment, insurance and health and safety sections), the HR Schools Team, in conjunction with the Global Mobility Co-ordinator will take the lead, co-ordinating advice from key partners, with mutual co-operation from all concerned in order to complete Section 2 of the HR56 form.

On completion of Section 1 and 2 of the HR56, the form should then be formally approved, along with the Risk Assessment by the Head of Department and Schools Team.

Once fully approved, the relevant HR Team, in conjunction with the Global Mobility Co-ordinator, will ensure that, if necessary, the member of staff is set up on an overseas payroll and is issued with an Overseas Assignment Agreement, to be attached to their contract of employment, setting out the local terms and conditions that will apply before they take up the overseas assignment. 

The employee, supported by their manager, will be expected to obtain any local visa that is required and arrange appropriate medical insurance.

Q. What is an Overseas Assignment Agreement?

As an Addendum to the individual’s employment contract, an Overseas Assignment Agreement will be drafted.  The Overseas Assignment Agreement summarises the main terms and conditions specific to the overseas assignment and repatriation (if applicable), ensuring that the employee and the University are clear on their mutual entitlements and obligations.

Q. What happens when the overseas assignment is due to end?

At least three months before the overseas assignment is due to end, the Manager and Institution should discuss the future intention for the overseas assignment.  There may be justification to extend the overseas assignment or it may terminate as planned.  The termination of the overseas assignment may also coincide with termination of employment.  In all cases, the HR Schools Teams should be informed as soon as possible so that advice can be sought on the implications of any extension, termination of employment etc.

Q. Can an overseas assignment be extended?

Yes, an overseas assignment can be extended.  However there needs to be a sufficient business case for the extension and the implications on tax, social security, payroll, pensions etc. will need to be reviewed again.  For example, as a result of an extension the individual may break UK tax residency, and create a tax presence in the Assignment Country.  This may require a transfer to an overseas payroll.

Please contact the HR Schools Team to discuss any extension before this is agreed with the individual.

Q. When will the employee create an overseas tax liability?

Tax regulations vary from country to country.  The majority of countries will look at the number of days an employee is present in the overseas location (days presence).  Commonly if an individual is present for more than 183 days in the tax year of the overseas location, the employee will become liable to tax in that location, regardless of where salary is paid.  However, in some countries a tax liability will be created before 183 days presence has been reached and other factors may be taken in to account, such as centre of economic interests.  It is therefore strongly recommended that the employee seek personal tax advice if they are intending to work overseas.

Q. What are Double Taxation Agreements?

Double taxation agreements specify which country has taxing rights over an individual, and, if they both have such rights, which one takes priority.  They may also agree to exempt some income or gains from tax or allow a set-off of tax paid in one country against tax due in the other.

There is a list of the current double taxation agreements on https://www.gov.uk/government/collections/tax-treaties

Q. What is Double Taxation?

Different countries have their own tax laws. The fact that you pay tax in one country does not necessarily mean you do not need to pay tax in another.

If an employee is resident in two countries at the same time, or is resident in a country that taxes worldwide income and has income and gains from another (and that country taxes that income on the basis that it is sourced in that country) the employee may be liable to tax on the same income in both countries. This is known as ‘double taxation’.

Where two countries try to tax the same income, there are a number of mechanisms to give tax relief so that you do not end up paying tax twice. The first mechanism to consider is whether the double tax agreement between the UK and the other country limits either country’s right to tax that income.

It is always recomended that employees seek professional tax and social security advice when working or living overseas.

Q. When would social security contributions become due in the overseas location?

Liability to social security varies from country to country, however it would not be unusual for a social security liability to be triggered in the overseas location as a result of any work being carried out for 3 months or more.  Social security schemes normally require contributions from the employee and the employer, so this can have a significant impact for the Institution.

It is worth noting that even if the employee carries out the majority of their work in the UK, if they have their main residence abroad and carry out 25% or more of their work activity in their country of residency (this activity could be for another employer), then they will be liable to social security in the overseas location.  Further information can be found here:

https://ec.europa.eu/social/main.jsp?catId=851&langId=en

Q. Is it possible to obtain an exemption from social security contributions overseas?

In some cases it is possible to apply for a certificate (an A1 certificate or certificate of continuing liability) under the relevant social security agreement which will retain the employee in their normal home social security scheme and exempt them from payments to the overseas scheme, where it can be shown this is a temporary posting for no more than 5 years.

Further details regarding the UK’s social security agreements can be found here:

https://www.gov.uk/national-insurance-if-you-go-abroad

https://www.gov.uk/government/publications/reciprocal-agreements

Q. What is an A1 certificate?

The A1 is a posted worker certificate which shows:

  • which country’s social security laws apply to you while you work abroad, and
  • to which country your employer/you should pay social insurance contributions.

Currently any employee who normally resides in an EU member state who is working temporarily in another EU member state can apply under the relevant EU social security agreement, to be covered under an A1 certificate. The EU social security legislation is designed to allow employees to remain in the social security scheme of their normal country of residence and exempt them from contributions in the EU member state in which they are temporarily working.

Applications for an A1 certificate can be made on this website:

https://www.gov.uk/government/publications/national-insurance-employees-going-to-work-in-the-european-economic-area-ca3822

Certificates are normally issued for a maximum of 5 years.

Q. What is a certificate of Continuing Liability?

The certificate of continuing liability is a posted worker certificate which shows:

  • which country’s social security laws apply to you while you work abroad, and
  • to which country your employer/you should pay social insurance contributions.

Any employee who normally resides in the UK who is working temporarily in another  country with which the UK has a social security treaty, can apply to be to be covered under a certificate of continuing liability. The social security legislation is designed to allow employees to remain in the social security scheme of their normal country of residence and exempt them from contributions in the country in which they are temporarily working.

Applications for a certificate of continuing liability can be made on this website:

https://www.gov.uk/government/publications/national-insurance-certificat...

Certificates are normally issued for a maximum of 5 years.

Q. When would there be a requirement to set up an overseas payroll?

It is likely that employee’s who are working overseas for extended periods will create a tax or social security liability in the overseas location.

In some cases, the overseas tax or social security liability can be settled directly by the employee via advance tax payments or end of year self-assessment.

However, these arrangements, whereby tax and social security is settled by the employee, or upon submission invoice, are not always possible.  In many countries, there is a legal requirement for the University to register as an employer in the overseas location to allow the employee to report their income taxes/social security and in some cases, it may be necessary to establish an overseas payroll for tax/social security to be withheld.

Q. What if I have any queries, comments or suggestions?

We want to ensure that the support that is provided to institutions is consistent and appropriate.  Therefore, any queries, comments or suggestions can be made to the generic email address monitored by the HR Division at:

globalmobility@admin.cam.ac.uk