‘Detached Duty’ or ‘Temporary Workplace’ Relief: how to apply it

It seems that Brexit will encompass a mutual recognition of EU workers in the UK, and Britons in the EU. Whatever the final details are, there is no doubt that foreign workers will always be needed in the UK. The question here is how they are treated for tax purposes, and the ways in which you can optimise the situation.

Detached Duty Relief

‘Residency’ is the key issue – how long a person is planning to spend in Britain, and what they will be doing when here. A simple count of days per year is not always the main criterion.

This is a tricky area to navigate, and we at Odiri Tax Consultants are often called upon to assist in individual cases where firms plan to employ overseas workers. Call us at the outset rather than once someone has already arrived.

Which category HMRC will apply to a given person can be uncertain, and planning will help to improve the tax situation, possibly by lessening slightly the length of stay.

Specifically, temporary postings of under 2 years can lead to opportunities for tax mitigation, via what is known as ‘detached duty’, or sometimes ‘temporary workplace’, relief from income tax on travel and subsistence costs when they are a direct result of their work.

The employee concerned must be linked to a company in their own country. This is not a benefit aimed at expatriates moving to Britain for good, but people coming to work on a secondment or set assignment on a temporary basis.

What can you claim?

The valuable claims against income tax include:

1. travel from home (or in fact anywhere) to work
2. reasonable accommodation costs – rent and utility bills – within commuting distance from work
3. daily subsistence (meal) costs

The lengthy list of rules includes the fact that these only apply to the worker, not his or her family. And as you would expect, the person must keep their expense receipts and documents in case of an HMRC inspection.

As well as detached duty, there are other possible claims that we can help you to make successfully. One example is where an employee has a contract here for as long as 3 years but will be making business trips abroad. This individual can potentially claim back income tax on the time spent on these overseas visits.

It is important to plan in advance for any case where you intend to bring someone in from another country on a temporary basis. This will allow us to advise you on the ideal restructuring of their tax situation. Contact Loveth Watson on 01733808075 .

Loveth Watson

Loveth is a qualified accountant and tax consultant with over 20 years experience. She started her career with top 5 accountancy practice and held the position of tax manager prior to starting her own practice. Loveth is a member of the Institute of Financial Accountants, Institute of Public Accountants and the Association of Taxation Technicians. Loveth’s background in accounting, corporate and personal tax enable her to advise shareholders on the personal tax implications of corporate structuring and transactions, ensuring a holistic approach to tax planning is provided. Loveth advises clients in the areas of accounting, tax and business development. Her main focus is in delivering services to owner-managed businesses and seeking structured solutions to the challenges that they face.