International HR Adviser Autumn 2019

AUTUMN 2019

ISSUE 78

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International HR Adviser The Leading Magazine For International HR Professionals Worldwide

FEATURES INCLUDE:

Are You Ready For Gen Z? • Employee Benefits • Are You Paying Too Much For Your Shadow Payroll?

Mobility Management: The Dangers Lurking In Your Legacy Mobility Management System The Transformation Of HR And Global Mobility Roles • Taking Care Of Wellbeing On Short-Term Assignments Global Tax Update • International HR Strategy: All You Need Is … Creativity!

Contractor or Employee? Why Getting It Right Has Never Been So Important • Is Global Mobility In Fashion?

ADVISORY PANEL FOR THIS ISSUE:

The 2019 Global HR Conference FOR GLOBAL HR PROFESSIONALS ONLY

Monday 14th October 2019

Smith & Wollensky, 1-11 John Adam Street, London, WC2N 6HT Registration commences at 12.30pm where tea, coffee and pastries will be available

SEMINAR PROGRAMME The seminar programme will commence at 1.30pm and each seminar will last half an hour with a half hour break at 3pm

Short-Term Assignments: Key Considerations

Short-term assignments are often regarded by businesses as a simpler alternative to their long-term counterparts, meaning that remuneration, policies and procedures may be given less attention. This session will look at: • Where short-term assignments fit in a modern mobility context • How companies remunerate their short-term assignees to attract and retain talent • Practical procedures and policy implications Hosted by ECA International

The Global Mobility Technology Ecosystem: Driving Insights & Enhancing Experiences

This interactive discussion examines the changing dynamic of today’s mobile employee and discusses how to create a personalised and enhanced experience through increased flexibility, automation and communication. We will explore the importance of utilising different data sets, such as employee pulse checks and your Global Mobility ecosystem, to analyse trends for evidence-based planning and decision making.

Hosted by Equus

Global Mobility Trends & Tax Update

The session will focus on latest mobility trends and guidance regarding latest tax and social security developments around the world but with a particular focus on the UK. The session will be of particular relevance for all global mobility, payroll, human resource, tax and finance staff involved with international cross border workers.

Hosted by BDO LLP REFRESHMENT BREAK

Evolving Assignment Types & Emerging Markets: How Focus On Risk Can Help HR & Global Mobility Professionals Enhance Their Value Contribution

Short-term assignments and extended business trips are becoming the norm as businesses seek more flexibility to manage talent, meet business needs and explore growth opportunities in new destinations, including emerging markets.

For HR and Global Mobility professionals this means added pressure to navigate a variety of regulations, legislations and risk environments while ensuring employees have the support they need to stay productive and engaged. But these challenges also bring new opportunities to enhance the value contribution of people and mobility management.

This session will provide useful, actionable information for HR and GM professionals by sharing examples and best practices.

Hosted by International SOS

Brexit Update – What Employers Need To Know

The immigration update will cover EU citizens’ rights after Brexit and the future of the UK’s immigration system Hosted by Kingsley Napley

A Comparison Of The Home & Host Country Compensation Approaches To Long-Term Assignments

There are two main approaches to the design of an expatriate compensation package for a long-term assignee – either the assignment terms are based on the country where they were working before the assignment began or the terms of the country where they will be working in the future. The Gallagher Mobility team will explore the components which both of these packages are based on as well as discuss the issues behind both approaches so that the HR professional can determine when each system should be applied.

Hosted by Gallagher

This event is free to attend so please email helen@internationalhradviser.com with the name/s of those who would like to attend, along with their job title and email address.

Sponsored by:

INTERNATIONAL HR ADVISER AUTUMN

In This Issue 3

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Are You Ready For Gen Z? Leah Kaiser, Crown World Mobility

Mobility Management: The Dangers Lurking In Your Legacy Mobility Management System Vicki Marsh, Equus Software

Global Mobility Update: Is Global Mobility In Fashion?

Stuart Jackson, Sterling Lexicon

Global Tax Update Andrew Bailey, BDO LLP

Taxation: The UK Is Still An Attractive Place To Work – Tax Reliefs For Inbound Assignees Andrew Bailey, BDO LLP

International HR Strategy: All You Need Is … Creativity!

Jeremy Couper-Crane & Ross Markham, Deloitte

Serviced Apartments: Taking Care Of Wellbeing On Short-Term Assignments Charlie McCrow, The Apartment Service

Are You Paying Too Much For Your Shadow Payroll?

Richard McBride, Certino

Employee Benefits Saira Chambers, Mattioli Woods

The Transformation Of HR And Global Mobility Roles John Rason, Santa Fe Relocation

Wellness: One Size Doesn’t Fit All – Make Mental Wellness A Priority For Your Globally Mobile Workforce Phil Austin & Matylda Dzadey, Cigna

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Contractor or Employee? Why Getting It Right Has Never Been So Important Ann Ellis, Mauve

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Directory

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Diary Dates

www.internationalhradviser.com HELEN ELLIOTT • Publisher • T: +44 (0) 20 8661 0186 • E: helen@internationalhradviser.com DAMIAN PORTER • Publishing Director • T: +44 (0) 1737 551506 • E: damian@internationalhradviser.com International HR Adviser, PO Box 921, Sutton, SM1 2WB, UK Cover Design by Chris Duggan In Loving Memory of Assunta Mondello While every effort has been made to ensure accuracy of information contained in this issue of “International HR Adviser”, the publishers and Directors of Inkspell Ltd cannot accept responsibility for errors or Neither the publishers of “International HR Adviser” nor any third parties who provide information for “Expatriate Adviser” magazine, shall have any responsibility for or be liable in respect of the 2omissions. content or the accuracy of the information so provided, or for any errors or omissions therein. “International HR Adviser” does not endorse any products, services or company listings featured in this issue.

ARE YOU READY FOR GEN Z?

Are You Ready For Gen Z? A Quick Guide To Generations

Meet Kavi, 22 and has just finished his last assignment on his company’s rotational training programme for new hires. He has secured a permanent position and can’t wait to get started, but there’s one catch: his assigned office is located outside of the city, in the quiet suburbs. Having spent the last two years living in corporate housing in major cities, he’s not ready to give up the busy social scene in exchange for “life in the burbs.” He’s also not sure if he can afford to live on his own, especially with the added expense of furnishing a new apartment.

Meet Marie-Therese, 25 and relocating from Canada to the US for a new role. She’s spent the last five years on the fast track with her company – finally buying her dream car last year. Though she’s willing to sell it and take advantage of the Loss on Sale benefit that’s part of her company’s relocation policy, she isn’t thrilled that her loss will likely be greater than what her company will cover.

And she’ll still have to buy a car when she arrives in the US!

Next Generation Mobility

The mobility industry has long been aware of how differing demographics, cultures and relocating employees’ lifestyles have required the need for some built-in flexibility – for both relocation policy and support.

More recently, disruption from today’s “youthquake” of Millennial and emerging Gen Z employees has only increased the need for flexibility, pushing mobility programmes and policy towards on-going innovation.

A number of global studies show that in most parts of the world Gen Zers, or the “iGeneration,” are similar to Millennials in that they increasingly expect an international opportunity at some point in their careers.

They tend to be more fiscally aware than their older Gen X and Baby Boomer counter-parts, and are concerned with the value of money. In the US, for example, the oldest Gen Zers are just starting careers and are often managing significant debt from student loans. The opportunity to relocate, be it domestically or internationally, provides them with a potential adventure. But for this latest generation of digital native employees, the traditional relocation services that have been offered as standard may not fit the bill. One clear outcome has been the rapid transformation of how industry suppliers provide their services – and it’s not always about developing new technology. This article highlights five ways that relocation services are transforming to meet the expectations and needs of this upcoming generation.

1. Co-Living, Roommates And Alternative Housing Options

Housing is one of the most interesting examples of where the needs of younger assignees or transferees are undergoing a big transformation, and it has a lot to do with Millennial and Gen Z lifestyle preferences.

Employees in their early to late 20s are often looking for the life experiences and adventure that an international assignment offers. They tend to be single and aren’t ready to purchase a home. They are even less likely to rent a home on their own, especially if their new job is located in the suburbs or a rural location. Proximity to an urban area or city where they might have more opportunities to explore and socialise with people their own age is appealing. As a result, new housing options are emerging that offer unique alternatives for early-career employee accommodations.

Alternative housing options, including companies that offer co-living spaces are popping up around the world. Bungalow, WeLive, Roam, Unsettled, Lyf, Hmlet, The Collective, Sun & Co, Zoku and Outsight are but a few examples, offering community housing in a number of formats.

Whether an employee is looking for a studio apartment or a communal living space, reminiscent of dorm-style living, many come with high-end design features. The amenities in a number of these housing options include curated social activities, like cooking classes, bowling nights, happy hours or urban tours, as a way to build “a community at home.”

To support this enhanced lifestyle flexibility, some service partners in the mobility industry have started offering similar amenities in corporate housing – like accepting the delivery of tenants’ packages, online maintenance portals where you can log in a repair request or roommate vetting services. They may offer housing in residential neighbourhoods for those who want a homely feel without missing out on the connections or opportunity for adventure that come with communal living. The alternatives that these providers are offering help facilitate the settling-in and community-building experience while keeping in line with younger generations’ interests.

2. Transportation, Commuting, Ride-Shares And Public Transportation

The development of alternative living arrangements, along with the growing popularity of green transportation options,

have led to a need for new approaches to transportation assistance.

Younger Millennials and Gen Z new hires often don’t feel the need to own a car in order to get around, and in the interest of saving money, may not want to budget for a parking spot or garage. They are well versed in ridehailing options like Uber, Grab, Didi and Lyft.

And smaller urban settings are joining major cities in many parts of the world in adopting more environmentally friendly, healthoriented alternatives to driving.

Bike sharing programmes address the need to access transportation, but also promote a healthy lifestyle. With the swipe of a credit card a relocating employee can grab a bike near home and return it to a port at their destination. Some cities have even extended this service to electric scooters. All of these are examples of supporting the flexible, adventurous, environmentally-friendly lifestyle that Gen Zers are looking for.

When it comes to commuting for employees who choose to or can only afford to live far from the office, there are alternative transportation options that allow you to reserve cars with less hassle and less cost than a lease or traditional rental.

Companies like ZipCar, Car2go, Maven and Hertz all provide options to rent a car for a couple of hours or a full day. They offer relocating employees the option to choose an occasional driving or monthly plan. ZipCar also offers a commuter rate that provides dedicated weekday access to a “personal” Zipcar and parking spot. For employees on a lump sum (cash) approach, this flexible, cost-effective option can be very efficient, especially if they can carpool with a colleague and split the cost.

3. New Approaches To Destination Services

When it comes to supporting the newest generation, many Destination Services

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INTERNATIONAL HR ADVISER AUTUMN

Providers (DSPs) also recognise that they need to work more flexibility into their service offerings. Younger Millennials and emerging Gen Zers want more guidance on how to get settled into new locations and lives, but they also want the autonomy to decide what that guidance looks like.

In many cases they may need more help with the day-to-day aspects of setting up in a new location than previous generations. Most of these relocating employees are early in their careers, primarily single and arriving without a partner to help share the responsibility of taking care of things like setting up utilities or opening a bank account. Time is money and they want to get these things done efficiently, taking as little time off work as possible, but still getting the full value of any Destination Services support they have access to.

To this end, and as a way to maximise the effectiveness of their programmes, many DSPs have started offering some of their settling-in services virtually. One example of this is a virtual home tour. With a virtual option the home finding process can begin before the employee has arrived in the new location. The local consultant will show the employee around properties using online platforms like Skype or FaceTime, giving them a head start on what might be available to them when they arrive.

This virtual option also provides increased value of the DSP assistance; traditionally a full area tour includes the driving time to get from property to property. This allows the employee to view more properties during the one or two days that are typically authorised for home finding.

For those employees who still want an area orientation but don’t want to take a full day off work, some local DSP consultants now offer to meet at a coffee shop or local restaurant to give a more concise version of the traditional, customised orientation. And when it comes to settling-in services, local consultants may make themselves available to help with time consuming activities such as installing local apps on the employee’s phone, waiting in line for a new driver’s license or meeting the local Internet provider at the employee’s new home in order to add value to the services they provide. What is key is that relocation providers are updating the choices and approaches to traditional DSP services through added flexibility.

4. Intercultural Training And A Value For Skill Building

Another area of assignment support that is adjusting to meet Millennial and Gen Z priorities is intercultural training.

Millennials’ expectation that an employer will invest in their development and give them access to a strong learning and development approach can be a deciding factor in joining the company.

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Younger relocating employees see intercultural training and skill building as an investment in their future. Although a number of changes to intercultural training began a few years ago with the first Millennials, the digital age has given younger generations access to a strong sense of global citizenry and of an interconnected world. It is this curiosity that encourages a need for personal development.

They are approaching intercultural training with more open- minded awareness of its meaning and value. They are more apt to recognise that there are a number of ways in which cultural differences can create large gaps in communication.

This generation understands better than others that cultural differences need examination, particularly in a business environment. This demand combined with this generation’s digital fluency with information gathering has led to changes in the format of intercultural training.

The original format of face-to-face training has segued into a blended training style; originally developed for early Millennials, the blended training has been very successful for this newest demographic.

Today’s intercultural services not only offer a post-arrival, face-to-face training experience (to answer questions and talk through potential issues), but also include a virtual training tool, allowing for on-going research and access to curated, vetted resources. These new options meet the iGeneration’s need for flexibility and satisfy their interests in “getting more for less”. Blended learning and virtual options have the added benefit of being cost-effective for companies, since using a virtual tool as a supplement has made oneday trainings the norm instead of the traditional two-day format.

This generation understands better than others that cultural differences need examination, particularly in a business environment

5. Moving Less Stuff?

A relatively new development in household goods shipping, Groupage has emerged as an alternative to the traditional Household Goods (HHG) shipments. Groupage is made up of smaller shipments, particularly useful for employees being given a Lump Sum (cash) assignment allowance and not a lot of stuff to bring with them.

It is common to find that Gen Zers might have a couple of suitcases filled with clothes and a small assortment of personal belongings.

They rarely have furniture, artwork or highvalue items. Groupage is a shipping approach that allows moving companies to combine several smaller shipments into one 20 or 40-foot container, saving space and cost.

The youngest of the Millennials and the emerging Gen Zers are already shaking up the mobility industry in many ways. They don’t want to spend as much money, they value the life experience that an assignment or relocation offers, and they want the flexibility to decide how their company’s relocation assistance can provide them with the most value. And many of the latest changes to meet their needs are quickly becoming the norm for the industry as a whole. The added flexibility and service options benefit employees from any generation.

The variety of new services that are available are just the beginning of a trend towards more concise, cost-effective, flexible, user- friendly mobility services. As the needs and expectations of relocating employees continue to evolve, and technology continues to change how consumers get information, make decisions and purchase goods, relocation services and support will continue to develop innovative service offerings to keep up.

LEAH KAISER

This article was authored by Leah Kaiser, a member of Crown’s Millennial employee population and Mobility Adviser, supporting early-career employees with their international and domestic relocations. If you have questions regarding this article or would like to find out more about our other services, please contact our Consulting Services at ljohnson@crownww.com or visit our website at www.crownworldmobility.com.

INTERNATIONAL HR ADVISER AUTUMN

The Dangers Lurking In Your Legacy Mobility Management System There is a cliché in IT: if something is not broken, do not fix it. Or, more accurately perhaps, do not replace it. What that means in reality for large organisations with big legacy systems is that imperfect and ageing technology that just about does the job is left to tick over.

And it is understandable. Sticking with what is known can seem a safer option than ripping out a tried-and-tested system of record and replacing it with something new.

There is a fear of the unknown.

However, as the world of global mobility management (GMM) evolves, this approach of keeping old legacy applications on life support, with sticky tape fixes, is not sustainable. At some point the wheels will come off. And not only does staying put on legacy create all sorts of hidden costs and risks to the business, but it also prevents organisations taking advantage of the many cost, flexibility and efficiency benefits of modern cloud-based software.

Hidden Costs Of A Legacy GMM System

Typically, when it comes to existing GMM systems, many large organisations will have their own home-grown bolt-on to the HR system.

And while they can get information from the HR system, it is not connected to other internal systems or their vendors for services such as immigration or relocation. When it comes to pulling together the full assignment cost estimate, the legacy system might cover demographic data and compensation, but not the costs and associated tax of relocation or immigration, as an example. Filling those gaps means using inaccurate spreadsheets or paying external providers to make calculations.

Take relocation service vendors, for example. They provide multiple services, but the mobility team does not have the visibility to pre-empt costly issues such as delays because all the information sits in the vendor’s system, which is not connected to the internal legacy system.

Smaller organisations might rely completely on spreadsheets or an Access-type database, which cannot be shared nor track who has made changes. And other organisations might just fall back on outsourced service provider technology, in which case all the data and insights sit on a third-party system with very

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limited access, resulting in a lack of visibility and transparency.

For those larger organisations with a homegrown system, the reality is that after a couple of years it will only be providing up to 50% of the functionality they need. And the hidden cost to the business lies in all the duplication, manual effort, errors and huge numbers of workarounds developed over time. It might not be a visible cost, but the time for a fulltime employee running reports because they have to pull the data from 25 different sources soon adds up. As do the fees for having to plug those functionality gaps in disconnected legacy systems by paying third parties to run cost estimates, compensation calculations and even payroll – all of which are now easily supported by modern GMM solutions. And for those organisations that stay with documentbased instructions, there is a very high risk to the accuracy of payroll data that is received and processed by the various payrolls.

Legacy Risks Lurk Beneath The Surface

There are other legacy risks too. IT organisations may be taken over or go out of business, or the software may be retired, meaning the legacy solution is suddenly unsupported. Internally, most IT departments are also under severe pressure and simply do not have the time, skills or capacity to continue making updates to a home-grown GMM system. Sometimes an organisation will decide to outsource the IT department completely. Either way, patches and fixes end up in a queue for months.

And internal audit could shut the system down because there are too many points of potential failure due to manual input. Or there is a lack of version control visibility and tracking who has accessed and changed things.

Things may appear to be working adequately on the surface, but all these hidden risks and costs build up until they suddenly reach breaking point. A very revealing exercise is to assess all the internal workarounds that have been put in place to support an inadequate legacy system that is stuck in time.

The only visible sign of these underlying legacy issues is the frustration and noise gradually getting louder from dissatisfied assignees due to avoidable errors, such as incurring a fine due to missing a tax filing deadline, or an immigration or social security document expiring.

Changing Global Mobility Management

At the same time, GMM and the nature of assignments is evolving and this is putting more pressure on those outdated legacy systems.

The standard employee assignment lifecycle is changing and HR departments and mobility teams must be able to adapt. More employees are moving in non-standard ways – shorterterm assignments and extended business travel, for example – and that means the lifecycle is different from case to case. The expectation of self-service and personal choice from assignees is increasing and the overall assignment lifecycle is getting shorter and shorter as the speed of time-to-post increases. Legacy systems simply cannot support this level of sophistication.

A GMM solution needs to have the agility to adapt to ever-changing legislation and political events that impact employees on overseas assignments. Recently we have had the EU General Data Protection Regulation (GDPR), and Brexit is still a huge unknown. One of the key upcoming changes due to come into full force in 2020 is the revised 1996 European Posted Workers Directive. This covers workers employed by a company in one EU country who are assigned to temporarily work in another EU country. The new rules are aimed at ensuring equal pay levels for the same work being done by these posted workers and local employees. That will affect calculations for wage scales, annual leave, expense reimbursements and allowances, as well as creating requirements for document and data retention on time sheets, salary payments, social security and health insurance.

There is generally an expectation of more flexibility and self-service around employee assignments as well. Younger entrants to the workforce expect to have more personal choice based on their circumstances. It needs a modern, joined-up GMM system to be able to offer that flexibility and personalisation, while also ensuring it is all trackable and reportable.

Let us not forget the battle for talent within the mobility team itself, either. When it comes to employees in the mobility management team, graduates and new talent do not want to work with spreadsheets and old legacy systems and spend their days doing tedious manual entry into spreadsheets and databases.

Those who have grown up in the digital world will choose to work for companies that offer them the opportunity to work with the latest technology. Bad tools could increase attrition.

MOBILITY MANAGEMENT Why Switch To A Modern Cloud-Based Solution?

The compelling argument and business case for switching from those ageing legacy mobility management systems is the cost and efficiency savings that a modern cloud-based solution provides. Think about the savings from a connected, automated system that eliminates all the manual entries employees are making into multiple payroll databases and downstream systems around the world.

In the cloud all the organisation’s data is in one place with real-time visibility across the network of systems, making it easier to track changes.

The security level provided by cloud vendors is usually much higher than most organisations could ensure themselves. Encrypted connections are in place and availability is higher with less downtime. This enables organisations to control access for only the people who need the information, and track that too.

A cloud-based solution also reduces the operating costs for an organisation and the maintenance and upgrading of legacy hardware and software. The right cloud vendor takes care of hosting and automatically updates to the newest versions of the software and the latest functionality. The cloud is also more scalable and can easily be ramped up or scaled down according to business needs.

But organisations need to plan and be realistic about migrating to the cloud for

mobility management. How easy it is to make the switch depends on the type of mobility programme, its complexity, how many different policies there are and how many HR and payroll systems the organisation is trying to migrate.

The danger with a legacy system is that it has been there so long nobody actually knows how it is calculating things, what the numbers are and what data it is using, and why it was that in the first place.

The right vendor can map out a clear path based on the organisation’s own situation.

But if significant changes are planned to the mobility programme at the same time as migration, be prepared for it to take significantly longer.

All of this is to say nothing of how to get the business case for making the switch approved.

Mobility teams are well accustomed to how frustrating and difficult this can be. There are endless barriers to overcome, with multiple stakeholders and layers of approval. And it is about navigating the corporate culture. Often there is a right way of presenting it. The best advice is to find someone who has done it successfully and get them, along with the right cloud solution vendor, to help navigate that maze.

Ultimately, the message is to be proactive.

Organisations cannot afford to just ignore those growing risks and costs lurking in legacy GMM systems. Start now to plan for the future and stay ahead of the competition.

VICKI MARSH

SVP Solutions Consulting, Equus Software.

Equus Software is the global leader in cloud-based international relocation and mobility solutions. More than 300 organisations around the world rely on Equus tools and technology to automate mundane, transactional work so that global mobility teams, talent management professionals and other key stakeholders can focus on adding value to the business.

Founded in 1999, Equus has a proven track record for delivering cutting-edge talent mobility solutions, continuous innovation and exceptional customer service.

Visit www.equusoft.com.

EQUUS ARE HOSTING THE FOLLOWING SEMINAR AT

The 2019 Global HR Conference FOR GLOBAL HR PROFESSIONALS ONLY

Monday 14th October 2019 at Smith & Wollensky, 1-11 John Adam Street, London, WC2N 6HT (very close to Charing Cross & Embankment stations)

The Global Mobility Technology Ecosystem: Driving Insights and Enhancing Experiences

This interactive discussion examines the changing dynamic of today’s mobile employee and discusses how to create a personalised and enhanced experience through increased flexibility, automation and communication. We will explore the importance of utilising different data sets, such as employee pulse checks and your Global Mobility ecosystem, to analyse trends for evidence-based planning and decision making.

This event is free of charge and is for Global HR Professionals only Please email helen@internationalhradviser.com with the names, job titles and email addresses of those who would like to attend.

We look forward to seeing you there

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GLOBAL MOBILITY UPDATE

Is Global Mobility In Fashion?

According to a recent study by Sterling Lexicon, the answer is a resounding yes. The study engaged several organisations in the luxury goods sector in a panel discussion to better understand which Global Mobility (GM) trends and issues are currently impacting companies and mobility programmes.

As a mobility representative of global fashion houses, upcoming brands, and high-end retailers, we wanted to identify the topics weighing on the minds of GM professionals in the luxury goods sector.

While the original premise was to identify common sector-specific themes, the panel discussion concluded that many of the challenges faced by GM professionals are universal to all areas of the global economy.

Policy & Programme Structure

Policy is usually at the centre of every GM programme and this is also true in the luxury goods sector. The study uncovered that many organisations in this industry admit to historically having loosely formed and inconsistently applied policies.

Often, these have constituted more of a benefits matrix rather than a set of formal policy documents. Organisations with larger programmes have incrementally introduced greater structure, such as formalised policies and processes, whilst younger brands acknowledged this as a future goal. Across both sides, executivelevel sponsorship was considered the most effective catalyst for change management, whether it be an alteration to an existing policy or the implementation of a new one.

This has facilitated the engagement and buy-in of the wide group of stakeholders touching GM processes. One sectorspecific challenge identified by a number of panel members was the absence of a strong culture of governance within the organisation, which could hinder getting executive-level sponsorship.

GM framework provides structure and consistency within an organisation and many panel participants said that whilst their companies were moving in a more universally centralised direction, a onesize-fits-all approach was not the answer.

Regional flexibility on policy application was a preferred solution and appeared to be working for programme owners. This type of programme structure provided clarity to potential employees and kept messaging

consistent for internal stakeholders.

However, some organisations are still grappling with intra-regional moves from a policy and regional buy-in perspective.

Employee Experience & Policy Flexibility

Providing equality and transparency as a part of the programme structure enhanced the overall employee experience. It also helped address an issue that one panel member brought up -- that “assignees were always suspicious that another assignee was getting a better deal.� The topic of policy flexibility was also discussed, as organisations in the luxury goods sector grapple with the ever-changing demands of younger employees. The panel study didn’t see organisations veering towards core/flex, but instead they were introducing a degree of choice and individual customisation into their GM packages. One example was the concept of a lifestyle allowance for things like after-school care, yoga classes, or care for elderly relatives. That approach generated positive employee feedback, according to one participant. In other cases, organisations added a lump sum of cash alongside services, which was also well-received.

Providing equality and transparency as a part of the programme structure enhanced the overall employee experience Overall it was found to be difficult to disentangle duty of care and well-being from flexibility. All panel participants recognised the need for an international Employee Assistance Programme and cultural training programmes, with an emphasis on equal access for all.

Talent Management

Employing talented candidates was also a main concern for organisations in the luxury goods sector. One panelist revealed that their organisation was in the early stages of putting psychometric testing in place during the candidate selection process.

Other panelists spoke about reviewing past employee performance and working to ensure that a succession plan was in place.

A challenge that some face is different brands sitting under one operating company that does not share similar HR or performance management systems, making it difficult to directly translate performance.

The study found measuring performance and planning for repatriation are as important as getting the right person in the right role in the right place. Repatriation planning involves pre-determining the role that an assignee will return to in advance. The majority of organistions that participated in the panel said they were committed to finding the employee a similar role, while a small number of panelists guaranteed the role the assignee left would be available upon their return.

The panel emphasised the importance of good repatriation planning, especially for employees who go out on developmental assignments in order to retain future leaders.

STUART JACKSON

As Account Director at Sterling Lexicon, Stuart focuses on working with clients to optimise their global mobility solutions .

Stuart has worked in global mobility for seventeen years. His broad experience of working with different programme sizes across a variety of industry sectors helps to bring success to clients' programmes and wider business strategies.

If you would like to discuss any of the points raised in this article or learn more about Sterling Lexicon, please do not hesitate to contact Stuart Jackson at stuart.jackson@sterlinglexicon.com.

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GLOBAL TAXATION

Global Tax Update AUSTRIA

Tax deductibility of foreign health insurance contributions According to Austrian regulations, obligatory social security contributions are deductible from the tax base. This rule is generally also applicable for foreign obligatory social security contributions.

A recent decision by the Austrian Supreme Court for tax matters (Verwaltungsgerichtshof) outlined the deductibility of foreign health insurance contributions in Austria. In general, statutory contributions are deductible expenses when calculating the income tax due in Austria. As the legal obligation of being subject to health insurance might differ in each country, the deductibility of the foreign health insurance contributions can be limited. The Austrian authorities distinguish between statutory contributions to foreign health insurance systems and contributions to private health insurance due to a legal obligation.

Statutory Health Insurance Contributions In many countries, employed and selfemployed persons are subject to statutory health insurance in their home country.

However, they might also be subject to taxation in Austria for their work performed in Austria. In the case that the foreign health insurance system is comparable to the Austrian system, the foreign health insurance contributions can be deducted irrespective of the assessment basis and the contribution rate. This indicates that there is no discrimination against persons who are subject to a foreign statutory health insurance system.

Private Health Insurance Contributions Due To Legal Obligations There are also systems without a compulsory health insurance but with a legal obligation to be health insured. In these cases, the Austrian tax law limits the maximum deductible amount with the Austrian health insurance amount. The difference here is that the contributions are only tax-deductible up to the Austrian maximum threshold for health insurance contributions, which is 8% of the threshold of EUR 5,220.00 in 2019. The reason for this restriction is that the higher level of these contributions generally refer to higher insurance benefits.

CANADA

Social Security in Canada and Quebec Like many countries, Canada has its own social security system; however, the Province of

Quebec has its own unique social security system, which works differently from the rest of Canada. It is therefore necessary to understand how both social security systems work.

In many countries, employed and self-employed persons are subject to statutory health insurance in their home country Canadian Social Security System (Excluding Quebec) Canada has two components of social security tax: • Canada Pension Plan The Canada Pension Plan (CPP) provides contributors and their families with partial replacement of earnings in case of retirement, disability or death.

As of 2019, CPP is being gradually enhanced, meaning increased CPP contributions which provides higher benefits to the contributors.

The increase in contributions will be phased in gradually in 2 steps over a 7 year time period.

Step 1: From 2019 to 2023, the contribution rate for employers/ employees will gradually increase by 1%.

Step 2: From 2024 to 2025, a higher limit will be introduced. This new limit, known as the second earnings ceiling will be in addition to the first earning ceiling. This new range of earnings will start at the first earnings ceiling and go to the second earnings ceiling which will be 14% higher

by 2025. Like the first earnings ceiling, the second will increase each year to reflect wage growth.

Up until 2019, the CPP retirement pension replaced one quarter of the contributor’s average work earnings.

With the enhancement, the CPP will begin to grow to replace one third of the contributor’s average work earnings.

Once fully in place, the enhancement will increase the maximum CPP retirement benefit by about 50%; it will also increase the CPP disability pension and CPP survivor’s pension.

• Employment Insurance Employment Insurance (EI) provides temporary income support to workers when they are unemployed, or when they take time off due to specific life events, e.g. illness, pregnancy, caring for a new born or newly adopted child, a critically ill or injured person, or a family member who is seriously ill with a significant risk of death.

In 2019, the EI premium rate has dropped to 1.62% from 1.66% (2018) for employees.

Quebec Social Security System The Province of Quebec has three components of social security tax: • Quebec Pension Plan (QPP) QPP provides Quebec workers with similar benefits to that which CPP provides in the rest of Canada.

The enhancement of QPP also begins to take effect in 2019 and will be fully in place in 2065. The contribution rate has increased by 0.15% in 2019. The new plan will increase the income replacement rate from 25% to 33.33%.

• Employment Insurance (EI) EI for workers in Quebec is administered by the federal government and it does not cover maternity, parental and adoption benefits; as such, Quebec EI premium rates are slightly lower than the rest of Canada. In 2019, the Quebec EI premium rate dropped to 1.25% from 1.30% in 2018 for employees.

• Quebec Parental Insurance Plan (QPIP) In the province of Quebec, the maternity, parental and adoption benefits are administered by Revenue Quebec under the Quebec Parental Insurance Plan (QPIP). The government of Quebec has announced a decrease of the QPIP premium rate by 6% as of January 2020.

BDO Comment Due to the continuous change in the Canadian social security system, the

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employer should be aware of the additional cost of employees’ assignments in Canada.

Consideration should be given to: • Consultations before the assignment with the employer and employee to help the client familiarise themselves with the Canadian social security system, international social security agreements and the additional tax burden for both the employer and employee • Canadian payroll and shadow payroll calculations.

CHINA

Changes to the China and India double taxation agreement Amendments to the double tax treaty between China and India came into effect in June 2019. The agreement applies to all taxation from the 1 January 2020 in China and 1 April 2020 in India.

Main changes: • Persons Covered Further provisions on the taxation of income received via fiscally transparent entities • Resident tie-breaker provisions Where you are a dual resident there are additional tie-breaker provisions to determine where you are ultimately regarded as resident for double tax treaty purposes • Permanent Establishment Changes relating to the time periods reviewed regarding permanent establishments in construction engineering and services projects • Business Profits Reviewing how business profits are attributed to permanent establishments and which country has the taxing rights on these • Interests Clarification on the definition of ‘Central Bank’ in both countries being the People’s Bank of China and the Reserve Bank of India.

BDO Comment As we go forwards we anticipate China will sign up to more double taxation agreements and social security agreements.

Notice on individual income tax preferences for Guangdong - Hong Kong – Macua Greater Bay Area To support the development of the GuangdongHong Kong-Macau Greater Bay Area, the Ministry of Finance and the State Taxation Administration released the Notice on Individual Income Tax preferences for Guangdon-Hong Kong-Macau Greater Bay Area (Cai Shui [2019] No. 31, hereinafter referred to as “Notice No.31”).

Notice No. 31 stipulates that Guangdong Province and Shenzhen Municipality shall, in accordance with individual income tax differences between the Mainland and Hong Kong, grant subsidy for overseas

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(including Hong Kong, Macau and Taiwan) high-end talents and highly sought-after talents working in the Greater Bay Area.

Such subsidy shall also be exempted from individual income tax.

The scope of application of this Notice shall include nine municipalities in the Greater Bay Area Pearl River Delta namely: • Guangzhou Municipality • Dongguan Municipality • Zhongshan Municipality • Jiangmen Municipality • Huizhou Municipality • Zhaoqing Municipality

This is a change from the way double tax treaties are usually structured, where the country of residence reduces its taxes to avoid double taxation.

As Danish tax rates are generally higher than French tax rates, the Danish tax minister estimates that a substantial part of the tax revenue from Danish pension payments to pensioners resident in France will be attributed to Denmark.

Transitional rules will apply to pensioners, who had already relocated to France on 28 November 2007 and started receiving pension payments on 31 January 2008.

LUXEMBOURG

A new double tax treaty, based on an agreement between the French and Danish authorities will come in to force after the previous one was terminated in 2008 DENMARK

New double tax treaty between Denmark and France A new double tax treaty, based on an agreement between the French and Danish authorities will come in to force after the previous one was terminated in 2008.

The agreement will benefit Danish companies and individuals in France, particularly Danish pensioners wanting to spend their retirement in France. The agreement states that Danish pension payments to pensioners residing in France will no longer be fully taxed in both countries.

According to the new agreement, in return for the right to tax Danish pension payments received by pensioners residing in France, it has been agreed that Denmark will reduce Danish taxes on pension payments with an amount corresponding to French taxes.

Social security treaty with China The social security treaty signed between Luxembourg and China in 29 November 2017 entered into force on 1 May 2019.

This is the first social security treaty between the two countries and it applies only to pension coverage. It does not cover other risks such as sickness. The treaty also foresees specific provisions for seafarers and aircraft crews.

Under the treaty, an employee who is seconded from one country to the other remains covered by the pension insurance scheme of their country of origin if the duration of the secondment does not exceed 5 years. Beyond this initial period, the assignee may still be covered by the pension insurance of their home country if the authorities in both countries provide their agreement.

As from 1 May 2019, the employees of Chinese companies seconded to Luxembourg may therefore remain within the Chinese pension scheme.

BDO Comment It is worth noting that for ongoing assignments, the 5-year secondment period is deemed to start on 1 May 2019, so that periods of assignments before that date are ignored.

UK

PAYE - NT (Nil Tax) Codes NT Codes are generally issued to an employer‘s payroll team when an employee is sent on an assignment outside of the UK and they are no longer a UK tax resident.

Applying an NT code means that the employer does not have to operate PAYE on employment income relating to non-UK work duties, however, this doesn’t relate to National Insurance contributions and this will have to be reviewed separately.

NT codes should take effect from the departure date to prevent double taxation, so it is imperative that you complete the relevant forms and send them to HMRC prior to employee commencing their assignment.

HMRC has advised that a letter including the relevant information will suffice, however, in some cases HMRC are still requesting a departure form P85 is completed.

GLOBAL TAXATION BDO Comment Timely completion of the relevant letter or P85 means that an in-year PAYE adjustment can be made. Do be aware that where matters are dealt with later on in the UK tax year, HMRC may struggle to issue the NT code before the final payroll run prior to 5 April.

In such cases any PAYE refund due will need to await submission of the annual tax return, which may not be until several months later.

US

Foreign tax credits now available for French social security paid by US persons In a recent status report on a case in US Tax Court, Eshel v. Commissioner of Internal Revenue (Docket 8055-12), the IRS acknowledged that the French Contribution Sociale Généralisée (CSG) and the Contribution pour le Remboursement de la Dette Sociale (CRDS) should be considered income taxes. This means that these taxes would be either deductible or creditable on the US tax returns of US citizens and green card holders (lawful permanent residents).

Previously, the IRS held that these taxes were considered a social levy and could not be claimed as a deduction for foreign taxes paid or included in the calculation of the foreign tax credit on a US return. The US Tax Court initially agreed with the IRS

in its 2014 decision on the case; however, under appeal by the taxpayers, the case was remanded to the court with instructions that it consider French law and the views of the US and French governments regarding the Totalization Agreement. On 13 June 2019, documents filed in US Tax Court indicate that the IRS concedes that these taxes are income taxes and should be deductible or creditable on US tax returns.

As a result, US citizens and green card holders may now claim a deduction or credit

for these taxes on their US tax returns for the current (2018) year and previous ten years. For taxpayers who claim the Foreign Tax Credit, they may find that claiming these taxes on their previously-filed returns, through amendments, will increase foreign tax credit carryovers applied to 2018. This may create an available credit to offset US taxes due on foreign source income (income earned in a foreign country or countries), which otherwise might not have been available due to the 2018 French “White Year,” where no French income tax was due on “non-exceptional” income.

US citizens and green card holders may now claim a deduction or credit for these taxes

BDO Comment This IRS change in position with respect to claiming a deduction or credit of CSG and CRDS taxes may create opportunities not only for the US citizens and green card holders living and working in France, but also for their employers who may have equalised the taxpayers during their assignment in France and paid the French income, CSG and CRDS tax liabilities.

Prepared by BDO LLP. For further information please contact Andrew Bailey on 0207 893 2946 or at andrew.bailey@bdo.co.uk

DON’T MISS THE GLOBAL MOBILITY TRENDS & TAX UPDATE AT

The 2019 Global HR Conference FOR GLOBAL HR PROFESSIONALS ONLY

Monday 14th October 2019 at Smith & Wollensky, 1-11 John Adam Street, London, WC2N 6HT (very close to Charing Cross & Embankment stations) PLEASE JOIN INTERNATIONAL HR ADVISER AND BDO FOR THE FOLLOWING SEMINAR THAT BDO ARE HOSTING:

Global Mobility Trends & Tax Update

The session will focus on latest mobility trends and guidance regarding latest tax and social security developments around the world but with a particular focus on the UK. The session will be of particular relevance for all global mobility, payroll, human resource, tax and finance staff involved with international cross border workers.

Hosted by BDO LLP To register your free place at The Global HR Conference, that is for Global HR Professionals only, please email your name, job title and company name to helen@internationalhradviser.com We look forward to seeing you there

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TAXATION

The UK Is Still An Attractive Place To Work – Tax Reliefs For Inbound Assignees At the time of writing this article, with the UK due to leave the EU shortly, a great deal of questions remain about the continuing attractiveness of the UK for business. Concerns have been, and continue to be, raised in relation to the impact the withdrawal from the EU may have on the ability of the UK to attract inward investment and businesses in the same numbers as it has historically achieved. At the employee level there continues to be substantial tax reliefs and advantages available through careful planning, which will make the UK an attractive ‘tax perspective’ destination for inbound assignees. The UK is still very much ‘open for business.’

The various tax reliefs have been available for a number of years but are worth remembering from an employer perspective as they can continue to make an assignment to the UK an attractive proposition for employees when considering comparative net income levels on a country by country basis.

Naturally, where tax equalisation applies any reduction in the amount of UK tax payable benefits the employer, however, the resulting reduction in effective employment cost provides the employer with a greater monetary cushion with which to pay the employee.

Non-Domiciled Individuals And The Remittance Basis

The laws surrounding the concept of domicile are complex and it is not the intention of this article to give more than superficial detail in this area.

As a general rule, a UK tax resident individual who was born abroad to a foreign father, who does not intend to remain in the UK permanently or indefinitely, is unlikely to be domiciled in the UK. The UK continues to offer very favourable tax rules for individuals who, although they are tax resident in the UK, are not domiciled here – the so-called ‘non-doms’.

These individuals, where eligible for the remittance basis of taxation, are only taxable on foreign income and gains if they are remitted to the UK. The foreign income can in certain circumstances, and for a limited

period, include earnings attributable to employment duties carried on outside of the UK once the individual is UK tax resident.

Overseas Workday Relief

Whilst individuals who are tax resident and domiciled in the UK are generally subject to UK income taxes on the full amount of their earnings, a valuable tax relief is available in certain circumstances for those individuals who are not UK domiciled who come to the UK to work. This relief relates to the employment earnings that are attributable to work duties performed overseas (outside the UK) and is known as Overseas Workday Relief (OWR).

The employee needs to have been non-resident in the UK for three UK tax years prior to starting work in the UK to be eligible for the relief The employee is generally the beneficiary of the available OWR, except in situations where a net pay/tax equalisation arrangement is in place, in which case there can be significant tax savings for employers The relief is available to non-domiciled employees for the first three tax years of residence in the UK provided they are: • Resident but not domiciled in the UK in the tax year, and • Are taxed on the remittance basis for that tax year, and

• Carry out employment duties both inside and outside of the UK for that year, and • Have their salary paid into an overseas ‘qualifying account’.

The employee needs to have been nonresident in the UK for three UK tax years prior to starting work in the UK to be eligible for the relief.

Whilst employers can obtain advance clearance from HMRC to operate PAYE only on the percentage of total earnings attributable to UK duties (a ‘section 690 ruling’), it is becoming more common for the relief to be claimed via the individual’s Self-Assessment Tax Return. A reconciliation or true-up of the actual OWR position will in any event take place within the UK tax return as the PAYE advance clearance works on estimated percentages as actual UK/ non-UK workdays will not be known at the time of application.

The relief allows employment income relating to work duties performed outside of the UK to be taxed on the remittance basis. This means that income relating to the duties performed outside of the UK are only taxed if the income is brought into the UK. There are complex rules on what constitutes remitting funds to the UK and guidance should be sought before doing so. Clearly where a sizeable percentage of work duties are performed outside the UK it makes it more worthwhile pursuing OWR. Where feasible, flexing the timing of a UK assignment may help maximise the amount of OWR relief available. For example, sending an individual to the UK on 6 March might result in OWR being available for a maximum period of 25 months, whereas deferring the assignment start date to 7 April results in OWR being available for an extended maximum 36 month period. The additional tax savings accruing could be significant.

Structuring And Record Keeping

There are complexities around structuring that need to be navigated in order for a successful claim to be made.

If an individual wishes to claim OWR it is advisable for a new overseas bank account to be established to receive the salary, and these details must be provided to the employer. A common practice is for individuals to set up an account in the Channel Islands or the Isle of Man as these territories are treated as offshore

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for the purposes of UK tax yet are within the UK bank system making transfers seamless.

Under OWR rules the account should be formally ‘nominated’ and relevant details provided to HMRC. This allows special rules to be applied to the ‘qualifying’ account in order to ease the claiming of OWR, such that the remittance position can be reviewed on an annual basis at the end of the UK tax year. If an account is not ‘qualifying’ there is a significant additional burden of having to review the eligibility for overseas workday relief based on each separate remittance of funds to the UK during the tax year.

To be a ‘qualifying’ account, the salary account must not receive any other income except the following: • Salary of the employee claiming the relief, relating to both UK and overseas duties (it cannot receive the salary of their spouse/partner) • Income or gains from employment related securities (this does not generally include most co-investment and carried interest funds distributions) • Interest earned on the account.

The account must also not have a balance of more than £10 when it receives a payment of employment income on which OWR will be claimed.

In terms of record keeping it is important for the individuals to keep schedules of their working time throughout the year and record UK and non-UK workdays. In respect of the non-UK workdays the more information that is retained the better, and our recommendation is for an individual to retain itineraries for all work, detailing the date and nature of any meetings (including attendees), as well as copies of expenses claims made and tickets for travel. OWR can be a valuable tax relief and therefore it is a common target for HMRC enquiry into tax returns filed by non-domiciled individuals.

Record keeping is key as HMRC can partially or completely deny the relief if insufficient evidence is in place to support the claim of an overseas workday.

Clearly records will also need to be kept of all remittances to the UK. This would include salary and taxable benefits provided directly in the UK, transfers of funds to the UK and use of a credit card to acquire goods and services in the UK. Anti-avoidance rules apply for those seeking to circumvent the rules for determining the amount of the remittances.

Where individuals do not need all of their current employment income to be received in the UK in order to be available to spend, or where they have other funds available to supplement current employment income, it makes eminent UK tax sense to leave such surplus funds outside the UK in order to maximise OWR. Some employers may believe that it is wrong or inappropriate to pay individuals

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outside the UK. However, it is very important to note that OWR is a specific UK tax relief that is clearly set out in UK tax legislation.

Such legislation is designed to encourage individuals to be based in the UK for work purposes. Many countries around the world offer comparable tax advantages to entice employers and employees. Providing the employer operates PAYE as directed by HMRC, any variation made by their employee in the number of non-UK workdays or in the level of remittances is a taxation matter for the employee and is their personal responsibility – not that of the employer. There is nothing whatsoever inappropriate or illegal for an employee to choose to be paid outside the UK – as long as the employer in deducting the right amount of UK PAYE and the employee is paying the right amount of UK tax.

Temporary Workplace Relief

The other major relief available to individuals coming into the UK for work is Temporary Workplace Relief (TWPR). This is also referred to as Detached Duty Relief but for the purposes of this article we will use TWPR. Employees coming to the UK on a temporary assignment from an overseas jurisdiction can be determined to be attending a temporary workplace if the duration of their attendance at this workplace is not intended to exceed a period of 24 months.

TWPR allows individual to gain a deduction from earnings for reasonable travel expenses (including subsistence) incurred and includes items such as those below: • Accommodation • Fuel Bills • Council Tax • Water Bills • Subsistence • Home to office travel (usually considered private commuting and taxable).

It should be noted that the expense deduction relates only to the individual and not to the expenses of family members accompanying them on their assignment. A suitable discount/reduction to reflect their presence and, any additional cost, needs to be taken into account in any claim.

The expense deduction can generate substantial tax savings for the individual, and in cases where the employer has agreed to provide the benefits as part of the secondment contract, the saving is passed to the employer.

Assignment Planning

To support a claim for TWPR it is necessary for the documentation relating to the assignment to be fully consistent with the facts and claim that the intended period of the assignment is for less 24 months.

The documentation most likely to be reviewed in the case of an HMRC enquiry

into an individual’s Self-Assessment Tax Return are the assignment letter and rental arrangements. Should these documents suggest an assignment period of longer than 24 months then the relief will be withdrawn.

In situations where the intention to remain in the UK for a period of less than 24 months subsequently changes, the relief is withdrawn from the point at which the change of intention occurs. As such, correspondence on any decision to remain in the UK beyond the 24 month period should be retained in order to substantiate the date on which the intention can be demonstrated to have changed and therefore retain access to the relief for the longest permitted possible period.

HMRC will also consider other factors which may indicate when the change of intention occurred, such as enrolling children in a new school – or extending their UK schooling arrangements – applying for new jobs/positions etc. Assignees are recommended to bear this in mind and to properly document the changing intention if the decision is verbally agreed.

Other Reliefs To Consider

Beyond the two main reliefs described above there are a number of other reliefs that contribute to continuing to make the UK a popular destination for international assignments as follows: -

Relocation Cost Exemption

There is an exemption for ‘qualifying’ relocation costs up to an amount of £8,000 when an employee is relocating.

‘Qualifying’ costs are tightly drawn within the legislation but include the following broad categories of expense: • Expenses of the disposal of the employee’s former residence • Expenses of the purchase of the employee’s new residence • Bridging loans in relation to the purchase and sale of employee residences • Transportation of personal belongings • Travel and subsistence relating to the relocation • Certain domestic expenses for purchases of replacement goods for a new residence where the existing goods are unsuitable for use.

As the definition of a ‘qualifying’ cost is tightly drawn, it should be noted that this is an area where care should be taken to ensure that the tax relief is actually available.

A common misconception is that long-term storage of belongings is a ‘qualifying’ cost but this is not the case, and has tax implications where provided.

The expenses must be incurred by the employee and reimbursed by the employer, or the benefits must be provided directly by the employer and be paid before the end of the tax year after the one in which the

TAXATION employee began performing the new duties or began the new employment.

Please note that the initial costs of travelling to the UK to take up the assignment are also not taxable in the UK, in addition to any ‘qualifying’ relocation costs.

Home Leave

Relief is available for the costs incurred in visiting the home location while on a UK assignment if the assignment lasts for at least a period of 60 days.

Travel costs must be provided directly by the employer or the costs must be incurred by the employee and reimbursed by the employer.

The employee can take an unlimited number of trips back to the home location per annum. The family members are however restricted to a maximum of two return trips per annum.

Personal Allowances

The UK provides a tax-free personal allowance of £12,500 (2019/20) which certain expatriate individuals may be able to benefit from when coming into the UK. Eligibility for the personal allowance can be impacted by the levels of UK and foreign income of the individual.

General

As mentioned at the outset, the UK tax system is such that tax reliefs extend

beyond employment income. Foreign (non-employment) income and gains are only taxable in the UK if they are remitted to the UK – one can simply leave such funds to accumulate outside the UK. Additionally, assets are only subject to UK Inheritance Tax to the extent that they are sited in the UK. These tax reliefs persist for seven UK tax years before time limits start to impact the level of benefit and the tax advantages are gradually withdrawn. This extended period will usually cover all typical international assignment arrangements.

Summary

Naturally the future attractiveness of the UK as a place to do business is still very much in dispute and dependent on the terms of any withdrawal of the UK from the EU. Irrespective of this there is much the UK has to offer from a UK tax perspective to individuals coming to the UK to work, either as non-domiciled individuals or as short term assignees.

It is necessary for careful planning and structuring to be undertaken, together with robust practices to be maintained in relation to record keeping, but if appropriate steps are taken it remains possible for individuals coming to the UK to take advantage of very generous tax reliefs and significantly reduce their UK tax liability in the process.

ANDREW BAILEY

Head of Global Employer Services at BDO LLP. He has over 30 years’ experience in the field of expatriate taxation. Andrew is indebted to Stuart Strong for his major contribution to this article. BDO is able to provide global assistance for all your international assignments. If you would like to discuss any of the issues raised in this article or any other expatriate matters, please do not hesitate to contact Andrew Bailey on +44 (0) 20 7893 2946, email Andrew.bailey@bdo.co.uk or Stuart Strong on +44 (0) 20 7893 2804, email Stuart.strong@bdo.co.uk

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INTERNATIONAL HR STRATEGY

All You Need Is... Creativity!

While perhaps not immediately obvious, the role of a global mobility professional is actually very much one of a communications specialist.

Take a moment to consider the number of stakeholders you interact with on a weekly basis.

Internally, employees, business unit leaders, representatives from HR, tax and finance; externally, service providers, business partners and tax and immigration authorities in multiple countries.

Each stakeholder will have a different perspective on their relationship with you, and their own expectations of the style of communication anticipated. Quite a challenge!

At Stitch, a Deloitte business, we’re passionate about creating innovative communications that engage employees, taking subjects that can, at first glance, seem complex or uninspiring and turning them into compelling stories that elevate the employee experience.

A key mantra we’d urge global mobility professionals to adopt would be to think of each stakeholder as a consumer. Starting out on any project we think first and foremost about the end user; what do they need to know and what is the best and most engaging way for them to receive that message? When answering that question we usually find creativity is key. As the employee is the ultimate consumer of global mobility services this article focuses on engagement with them, particularly as the volume, timeliness and criticality of information can feel overwhelming. Whether it’s the intricacies of tax equalisation or the complex web of vendors that the employee will have to directly interact with, our clients are keen to disseminate what they rightly see as important and valuable information to their employees; but sometimes this can be quite technical data that can seem anything but user-friendly. As global mobility specialists, our job must be to turn that information into something employees find compelling, engaging and inspiring.

And that’s pretty much how any marketing professional would think when devising a creative campaign for a consumer product.

Decide what the end user is likely to find appealing about the product and use that to drive consumer engagement. We all consume

creative marketing content on a daily basis, on our high streets, public transport or in store, through commercials on TV and radio, or banners on websites and emails.

We expect to see it, and if it engages with something inside us then we’re likely to react to it in a positive way. It calls us to action. To react. To participate. To be involved and to buy. It can make us smile and it can make us feel good about ourselves. We know it works.

It’s a multi-billion pound industry. So why should the way we communicate important information to employees be any different?

It’s no less important.

Employee Experience Is Key

Employees today have much higher expectations of their employers and their working environment. Corporate transparency is high on the employee agenda. We see organisations that focus on transparency engaging employees more than those that don’t. A 2018 Forbes report (1) found multiple studies that showed employees indicate company transparency is the number one factor in determining workplace happiness. They want to know they can trust in their leaders to help deliver a positive work environment and opportunity for growth and career development. It’s a challenging landscape for employers to negotiate as it can often mean significant change in corporate practice, but it’s in their interests to keep up with trends so they can attract and retain the very best talent.

Executives and leaders know employees who feel valued and empowered are the beating heart of a successful business. The 2019 Deloitte Human Capital Trends Report demonstrated the value placed on improving employee experience, with 84% of people consulted rating it important and 28% classing it urgent.

Think Outside The Workplace

So how can we as global mobility professionals help our businesses deliver an optimal employee experience? The answer may well lie in the creative way we, as consumers of modern technology, express ourselves in our lives outside the workplace.

We now lay bare so much of our lives for all to see on social media. We check in to restaurants, bars or holiday resorts; we post pictures and stories of amazing experiences, nights out, cute pets, new clothes and babies.

People are doing whatever makes them happy and they’re shouting about it. Why would we not want to provide an employee experience that would make employees

happy enough to want to shout about it too? Of course this is exactly what we want to do. And if we always bear our consumer/ employee in mind then there’s no reason why we can’t do it.

Stitch recently provided a communications solution for a major global engineering firm.

They were launching a scheme that promised free shares to all employees over a period of three years. The plan was promoted less on its financial credentials but more as being a way for every employee to feel an integral part of the company they work for, empowering them to do their best work so they could all share in the company’s success. The key to global engagement was to create a strong campaign name and strapline as well as a range of clear communications that would reach everyone, regardless of geography or financial literacy and which would make employees feel valued and part of something important.

And it worked. The company held a worldwide celebration to launch the plan.

People stopped work for a moment to enjoy themselves together, dressing up, baking, and posting photos and comments about their excitement at being part of this moment on multiple social media platforms. Whilst this wasn’t specifically a mobility project, the same principles and methodology could easily be transferred to global mobility. After all, the heart of the campaign was less about the subject matter and more about ensuring a positive employee experience.

Don’t Be Weighed Down By Old Ways Of Working

Of course it’s not all about creating a culture of internet humble bragging (though that’s never a bad thing!). Sometimes it’s not going to be possible. But it should be all about putting ourselves in the position of the employee and working from that perspective to inform our creative plans and actions. Remember an employee engagement strategy could be made up of hundreds of communications, some big, some small, but all adding up to the overall employee experience. In global mobility our methodology is to deep dive into each of these moments and try to understand how they are experienced by the employee - how would that interaction make them think or feel? What is the context in which they experience that moment – what are they likely to be doing and how can we make that moment a seamless part of their life or job rather than a disruptor to it? How do the Diversity & Inclusion aspects of our employees’ lives and careers impact the way

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in which they experience their journey and inform their expectations? Do Millennials want to receive information in the same way as Generation X-ers, for example? It’s not about creating a one size fits all approach, but designing something that puts actual humans, with all their foibles, wants, needs and desires at our heart.

A lot of what we do, on the face of it, might not seem to provide a canvas for creativity, but that’s just because we’re not used to thinking about it in the right way.

A popular emerging trend in employee communications is animation. It’s the perfect way to communicate to employees in a concise, colourful and engaging manner and has enormous scope in terms of style and structure. We know it works. Studies have proven that people retain 80% of information they consume visually compared to 50% aurally. Visual information is processed in our brains 60,000 times faster than text so it should come as no surprise that businesses are recognising the value of animation as a communication tool. Also, it’s fun! A host of topics which might on the face of it seem dry and uninspiring lend themselves perfectly to animation. When an average global mobility policy is over 40 pages long it’s little wonder employees rarely read them and instead come to briefings with reams of questions. A relatively simple but eye-catching animation could present the key contents of that policy in a fun and digestible way. And you don’t just have to drive your audience to an intranet page to view them. They can be played in communal work spaces, lifts, or even employee transportation.

Be Aspirational

This takes us back to thinking of the employee as a consumer. If you receive an email from your bank about a special mortgage offer it’s unlikely to be just several paragraphs of complicated, financial information. More likely it will feature some sort of aspirational imagery and clear headings, with links to more information and deliberate calls to action. You walk into that bank and there may be an animation playing on a big screen about the key points of that mortgage offer that catch your eye as a consumer. It’s designed to pique your interest and inspire you to find out more.

So it makes sense when communicating to employees to treat it in a similar way.

People respond to what feels familiar to them. If we have to promote the launch of a new global mobility policy for our existing assignees, think less about the nitty gritty of the policy’s detail. Instead think creatively about what the new policy will actually mean to an employee; what will change for that person. Use aspirational images to present the positive impacts of this change. Don’t neglect the negative impacts or hide them in

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the small print – instead be transparent about these, while emphasising the benefits of the package as a whole – not just financial, but the personal benefits of being an assignee (especially in terms of life experience).

world that can be entirely personalised to them. A real-life mobility use case is using a VR look-and-see trip to allow an employee and their family to get a sense of what life in their new location will be like.

Embrace Future Tech

Summary

It’s rare now to find FAQ pages on public facing websites. They have largely been replaced by chatbots which can answer specific questions submitted directly by the user. If your intranet pages are littered with FAQ sections, think about how this differs from what your employee is used to seeing outside of work and change it up. An engaged employee is a connected employee.

Rapidly developing technologies are perfectly placed to help enhance the employee experience in creative ways we’d never have thought possible a few years ago. Augmented reality platforms offer really exciting ways of interacting and communicating. Imagine hovering your phone over a picture of your company CEO and suddenly he or she comes to life and talks to you about the company’s employee engagement or talent agenda. Some are even using relatively inexpensive hardware to allow users to experience an artificial 3D

We know in business we value our customers above all else. But for employees the story can sometimes feel different. And it shouldn’t.

Employees make our businesses work. When they feel happy, valued and connected to their workplace it stands to reason they will stay with you, do better work and create a better working environment that will spread out across the business exponentially. Given mobile employees often represent our most strategically important employees, it makes even more sense to creatively enhance their experience.

Harnessing new and creative ways of improving the employee experience, and the ways in which you communicate will benefit your business for the long-term. Employees are what makes businesses work. Employees who feel valued, empowered and connected to their work life are what make businesses work better.

References: (1) 10 Things Transparency can do for your Company – Forbes Online, Oct 2018.

JEREMY COUPER-CRANE

Copywriter, Stitch - a Deloitte business Tel: +44 7920 364923 Email: jcoupercrane@deloitte.co.uk www.talkwithstitch.co.uk Having worked as a script writer for ten years alongside his day job as a planner for BBC1 Drama, Comedy and Documentaries, Jeremy upped sticks and moved from London to Bristol in June 2018, taking up a fulltime position as Copywriter for Stitch – a Deloitte business in March 2019. Since joining Stitch, Jeremy has worked on a host of communications projects for major global organisations, including scripts for pay and reward and share plan animations as well as interactive content for e-learns and gender pay sites, all of which are geared towards engaging and elevating the employee experience. If you would like to understand how Stitch – a Deloitte business can support your communications strategy please visit our website www.talkwithstitch.co.uk or get in touch – stitch@deloitte.co.uk

ROSS MARKHAM

Consultant, Deloitte Tel: +44 20 7007 6644 Email: romarkham@deloitte.co.uk www.deloitte.co.uk/globalworkforce Ross is a Consultant within Deloitte’s Global Workforce team, joining in September 2014. He has worked with over 100 organisations, across a range of industries and geographies, delivering digital transformation projects in the global mobility space. He has also been seconded to work in-house with client mobility teams, gaining practical insight into the day-to-day challenges that busy global mobility teams face. As a regular business traveller he also has first-hand experience of life as a mobile employee.

DELOITTE’S GLOBAL WORKFORCE PRACTICE

Deloitte’s Global Workforce team partners with organisations to establish future-proof global workforce strategies, tailored to client specific business and talent objectives. We embrace design thinking to help clients reimagine and transform their approach to talent mobility, focusing on areas including policy and process design, strategic and operational transformation, global talent strategies, digital innovation, planning and deployment, and workforce analytics. Find out more here www.deloitte.co.uk/globalworkforce

INTERNATIONAL HR ADVISER AUTUMN

Taking Care Of Wellbeing On Short-Term Assignments The advent of the new social order and a world where everything is seemingly available online and at your fingertips also makes it a more likely place where you or some of your fellow workers could feel insecure, left behind and feeling anxious. With so much information, news updates, social chit chat about, and more continually pouring in, the need to stay on top of it all can make you feel overwhelmed. This feeling of anxiety can be multiplied when there is an impending change of living location on the cards. To remain balanced and keep a sense of well-being, it is essential and highly beneficial to find sanctuary in a place inside or outside to relax and recharge in.

Companies who are sending people all over the world on short, or long-term assignments need to take this into account when relocating individuals and even more so when whole families are moving. Details concerning security, social connections, support and interaction with others in the new temporary location, city or foreign country, are essential for decision making – not just for the assignee (you) but possibly for their live-in partner also in many cases.

The work starts very early on in the sourcing process. Assignee involvement in the search helps create a more comfortable start and removes some of their ‘no-nos’, saving time being wasted - the assignee knows what they like or dislike. Searching for a temporary home isn’t all that difficult, what is though, is the quality accreditation and confidence that what you have seen online is what you will get. This was one of the first obstacles in short-term accommodation sourcing we identified way back in the late 80’s when there weren´t recognisable brands - and this still is a barrier.

Meeting the ‘tribal’ needs of younger generations are best left to them or with close engagement in my view. The new trend of co-living brings in a new dynamic – this would cover much of the criteria just mentioned and may be favoured as well. Again, availability for this option will be limited to if there happens to be a property in the location you want or

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not. This urban living lifestyle will probably be welcomed more by younger generations where there is an accepted and increasingly social and desired aspect to living closer together and meeting others with similar interests outside the assignment working community - a place to make new or meet friends as well. Most people are looking for a community feeling with meaningful social connections and involvement. Possibly, this co-living trend may be a substitute or replacement of the original community life which is disappearing more and more. Travel, assignments, urban growth and the trend for families to separate due to work or other social economic reasons means community life has structurally changed.

The promise of lower costs of co-living for employers should be an attraction too and support would be expected to be readily forthcoming Typically, these co-living options offer private sleeping quarters and have shared communal areas for cooking, dining and lounges for meetings or discussion. This isn’t really that far away from what traditional hotels have offered in the past and present, i.e. rooms and public restaurants and lounges. But with this new social culture growing, and properties developed for this purpose, it can be a great solution for some.

The promise of lower costs of co-living for employers should be an attraction too and support would be expected to be readily forthcoming. However, 58% of companies that we surveyed recently for the Global Serviced Apartment Industry Report (due out early in 2020) indicated they wouldn’t permit this option, 26% had an open mind and only 16% saying they would permit this.

I believe we will see a greater adoption when we do our next report survey in 15 months or so and watching developments here closely.

Other assignees may consider space and security to be paramount and not want a close living lifestyle – traditional serviced apartments provide for this option well and also offer support with someone on hand to assist with most matters.

When searching, you will see lots of options and then the subsequent refining of the search down to essential elements is only a part of it. A helpful look over the shoulder and expert guidance by a professional would be appreciated by most and would help avoid any pitfalls the inexperienced might fall into.

After all, how many times have you personally searched entirely on your own and relocated for stays of more than a few weeks/months?

As a professional HR person, you are doing this all the time and your views are important – most assignees will hopefully see this.

Another consideration is wellbeing. This is of paramount importance to employers who know that a healthy person works best when they are feeling well, but some of the factors involved in a transfer to another country and culture may have a negative - even though maybe only temporarily – impact on this.

Finding yourself in an environment that is not familiar could have a detrimental impact.

Offering cultural awareness information for business travel as well as for relocating assignees can help to appreciate and enjoy the diversity of the world when working away from home. These are things that we all want to avoid but are a real factor in today´s world. Mental health suffers, and the resulting risk of lapse of focus on the trip’s purpose should be evaluated, discussed and prepared for. Seeking support from local contacts, networks and interest groups should be researched and ideas identified early on – recommendations of where to go and where to avoid will help educate the transferee and give more clarity about the destination. This is generally well understood

SERVICED APARTMENTS

Simple enough but you have to just do it and not let yourself dive straight into a busy working schedule in the relocation industry where longer-term assignments are more typical, but in shorter stays away in the business travel sector, this may not be as well understood. Being away from friends and family and the separation of familiar emotional support can be set aside and even replaced for a short while by new acquaintances, but not be overlooked.

Accommodation providers can help, and could take note that John Lewis & Partners recently carried out some research and found that just over half those surveyed believed a

restful living area should be a ‘space for quiet and calm reflection’ with three quarters wanted ‘to read’ and one fifth ‘for yoga, mindfulness or exercise and not just a place to watch TV to switch off’. Natural materials, light, indoor plants and reducing clutter were also added benefits.

For those who are relocating or on business trips away, my recommendation is to take a day or two off on arrival, switch off from work and go explore some of the new places near you – museums, parks and also go

to a spa. Simple enough, but you have to just do it, and not let yourself dive straight into a busy working schedule. A day or two off will reap dividends in wellbeing.

For those professionals that arrange transfers or trips, a focus on alleviating the potential stress that can occur before and during a move is the best way forward prevention is better rather than cure. The holistic approach involves little effort - no more than you would normally willingly give to a friend or family in need of assistance.

CHARLIE McCROW

Charlie McCrow, CEO, has been the driving force behind The Apartment Service´s 38 years success and is a longstanding member of several industry bodies including CHPA, ARP, ERC, ITM, EuRA and UKAA as well as a founder member of the UK’s Association of Serviced Apartment Providers (ASAP).

Under his leadership the company has been at the forefront of innovation in the sector, the latest example of which is the TAS Alliance. The Alliance is the fourth and newest business in McCrow’s portfolio, joining independent global booking agency The Apartment Service, European extended stay brand Roomspace Serviced Apartments, and the Global Serviced Apartments Industry Report.

Charlie’s investment in technology and people has helped power the growth of the serviced apartment industry, also has a long history of alliances with independent operators to provide end-to-end short term stay solutions for buyers and travellers globally.

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INTERNATIONAL HR ADVISER AUTUMN

Are You Paying Too Much For Your Shadow Payroll?

Find Out How Certino Can Help You Reduce Your International Employment Costs With global mobility now a natural ingredient for enterprise organisations around the world, international employment assignments are commonplace. Business is done everywhere, and employees can move across many locations in a surprisingly short space of time.

This mass migration is complex to manage, especially with its associated legal and compliance demands. Taxes for employees on the move - or ' shadow payroll' as it's known - can quickly become expensive, inaccurate and cumbersome for those organisations not up to speed.

Certino, a UK headquartered fintech start up, has developed an intelligent automation ensures you get shadow payroll right from day one. One major way that Certino delivers tangible value to the shadow payroll process is by reducing your costs potentially by a significant amount. It does this in six distinct ways.

1. By Reducing Your Tax Costs

Certino automates shadow payroll processes, and therefore the end calculations involved in those processes, so it can reduce your tax burden both in terms of the amount of tax you actually pay, and the efficiency of the steps you take to get there – enabling you get it right first time, and consistently thereafter.

Accurate tax calculation relies on two elements.

Firstly, you need the right expertise in place to make that calculation. To know how to deduce the correct amount of tax owed, based on your income from different sources and geographies. To ensure that you're taking advantage of any eligible and available tax reliefs and other contributory elements. And to schedule activity effectively to make sure you're paying at the right time and in the right way: for example, regular social security payments.

Secondly, you need full visibility of your figures, so you can apply all this expertise from the very start and ensure that all results are accurate, timely and compliant. It sounds obvious. But often, it simply doesn't happen.

Or in fact, can't happen.

Most finance teams tend to be wellversed in local rather than global payroll

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structures. They're hired and located on the ground in individual markets rather than with a more holistic, global oversight in mind. As such, the personnel involved simply aren't equipped to perform complex multi-market tax management. They're not up to speed on expat rules and regimes, or how tax is best managed in several countries simultaneously.

Certino’s automated shadow payroll platform builds in these various tax-related scenarios to all calculations from the outset.

Everything is pre-configured during initial implementation, when they will spend time with you going through your specific situation, note any nuances along the way (such as tax relief opportunities and individual market requirements) then update details as they change going forward. This customisation happens at country, entity and project level, so nothing is missed and your tax payment position will always be accurate, wherever your employees work.

It stands to reason that to manage tax accurately, you need full visibility of your liabilities - as well as the intelligence to make appropriate payments. But this visibility can quickly break down when you're dealing with employees moving across multiple geographies in quick succession. With different parties involved, and a host of conflicting policies and requirements, the trail can quickly be disrupted. In contrast, Certino's intelligent platform receives all the relevant source figures from every country and consideration, then applies the relevant tax policies to calculate an accurate payment in real time. You save resources, time and effort - and a potentially significant amount of money. (Visual of 'Cost savings' scenario on next page).

Consider a 'traditional' shadow payroll situation for an expat employee. For simplicity let’s ignore gross ups and assume

ADVERTORIAL

that the Employment Tax [income tax and social security] is 25%. John is hired by an Oil & Gas company in the UK. The company pays him £10,000 a month. Income tax is paid at nominal 25% on a PAYE basis - so John pays £2,500 in tax and takes home £7,500.

The UK company decides to send John to Country A for 30 days to work on an oil project. They charge him out at £20,000 to cover salary, costs and mark up. However, although John's base is technically Country A for those 30 days, the team there end up sending him to Country B for 15 days to look at an oil rig. So, although he's technically managed by the UK for his 30 days, in reality he splits his time between two different countries altogether.

SHADOW PAYROLL At the end of the 30 days, the UK invoices Country A £20,000 as agreed. Since Country A’s Finance team have nothing else to go on, they pay 25% Employment Tax (£5,000) on this invoice. However, when it is pointed out that because John has only spent 15 of his 30 days actually in Country A, the Finance team there recharges the other 15 days on to Country B, where they pay another 25% Employment Tax (£2500). Since the Shadow Payroll and Rebill processes are separate, nobody realises that Employment Tax has been overpaid. Cumulatively then, the company will have paid £10,000 in employment tax on an original £20,000 invoicebetween the various countries.

In contrast, because Certino provides complete visibility of all countries from day one, and John's various requirements are pre-configured before he starts, big savings are made at two critical points. Firstly, the proposed taxable invoice amount (£20,000) is split evenly between the two destination countries, to represent the 15 days of time that John spent in each (= £10,000 invoiced to each). Then, the invoice is analysed to assess how much of it is actually taxable.

Once Certino has identified various nontaxable elements such as travel costs, admin fees, mark-ups and bonuses, in fact only half of the invoice (£5000) in each country is actually taxable.

ADVERTORIAL

Then, the same rates are applied: so income tax of 25% works out as £2,500 (£1250 in each country). Therefore, the total tax the company pays for the same assignment is £2,500 - as opposed to the £10,000 without Certino - a saving of 75%. Now, imagine multiplying that figure by 1,000 expat employees, and it's not hard to see that the savings can be huge (£7.5 million to be precise). Not to mention the amount of money that might otherwise be wasted on misallocation or delays. What's more, if an employee leaves or moves on to another assignment, it might prove difficult to ever recover that money, further down the line. So, it's not just about financial savings, it's about efficiency savings too.

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2. By Reducing Vendor Fees

Unfortunately, using third party vendors to manage shadow payroll can be relatively expensive. Largely because activity is performed manually by employees, and locally by market. The typical benchmark figure is £160 per person per month, although this varies markedly from one country to another (from less than £100 to over £500). In addition, most vendors stipulate a minimum headcount for their services in each location; if you don't have enough employees, you end up paying more per head. Certino charges just half that figure: £80 per person per month, regardless of country or headcount. Not only do you save money, but Certino's automated, centralised service keeps operational costs low and calculations accurate.

3. By Easing The Pressure On Internal Resources

It will be clear from what we've said so far, and what we already know about traditional processes, that shadow payroll management is resource-hungry. It takes time and effort for internal finance teams to gather and consolidate data from all the various locations and situations that employees are operating in; and then for them or a third party to manage associated tax issues on an ongoing basis.

Because Certino automates all this from start to finish, your organisation can expect to achieve efficiency gains by making processes much faster and easing the burden on internal teams. They will sit down with you before anything happens, to clearly assess what data they need, where they will get it from and how. Then they program everything in to their platform for ongoing shadow payroll management. This assessment is a one-time engagement; once it's done, everything else just happens automatically, accurately and in real-time. In short, it runs itself.

To further minimise effort on your part, Certino provides you with pre-created templates and regular report downloads so you always stay up to speed on your shadow payroll activity. This means that there is no longer a need for internal resource to spend time managing these processes every month, creating individual processes to manage for employees and countries, or repeating tasks unnecessarily. Data can instead simply be dropped into the Certino platform, as and when required. Everything is flexible and built around your organisational needs.

4. By Enabling Timely Corporate Tax Relief

As an international employee moves around from assignment to assignment, his or her costs are naturally rebilled to the relevant locations, according to how long they have spent there and what they've been working on. For example, if we take the earlier example, we see that as John is

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relocated to Country A and then Country B, a proportionate amount of his costs are then rebilled to account for that time. Tax is then applied and deductions are calculated in each individual location. Using traditional shadow payroll processes, these rebilling charges typically stay with the original host country (the UK in our example) until all paperwork is completed and projects are over. They are then transferred to the other locations for payment.

While this may be fine mathematically, it's not good for the balance sheet. Every day these unallocated costs sit there rather than on your P&L, they are impacting your cash flow and increasing your funding costs - while you're also missing out on any rightful tax deductions, particularly if the recharges are delayed until after a corporate tax year end. When you consider that the average cost of capital for Fortune 500 companies is 10% per year, this means that the average Fortune 500 company therefore loses 10% of these costs for every year they sit on their balance sheet. Again, when you consider the potential number of employees involved, it's easy to see how this can quickly add up.

5. By Enabling You To Bill Projects Faster

As projects are completed, it is in any company's best interests to invoice associated costs on to their end client as swiftly and efficiently as possible, for the same reasons as point 4. The longer these costs sit on the balance sheet, the greater the knock-on costs will be. Plus, it gives your teams better visibility of operations as they happen, so they can address and resolve any issues in a timely fashion.

What's more, if they sit there too long, your chances of being able to charge them on to your client successfully or accurately will become remote. Once the project closes, typically so too do your chances of reimbursement. The costs are swallowed by your business and therefore erode your profit margin. Certino's automated, real-time platform gives you the freedom to bill project costs as they happen, to ensure you are always up to date and never out of pocket.

6. By Enabling You To Offset Foreign Tax In Real-Time

The issue of foreign tax offsetting is critical for organisations with short-term project workers. They remain on their home country payroll, which is taxable in that country, but spend their actual working life moving from location to location completing contracts fluidly. As such, their tax affairs have to be micro-managed between each location concerned - rather like the working example of John discussed earlier.

Typically, the company pays the tax on the employee's behalf. Then, when the end of

ADVERTORIAL

the tax year arrives, the employee claims the money back on their tax return and refunds the company. But although this means that there is a repayment, it also results in a potentially lengthy delay of more than a year.

Certino instead performs this process in real time, as the tax is accrued. Employee time and associated tax is calculated for each host location and feeds back the details to the home payroll so the host country tax can be offset in real time. Again, this helps minimise the cost of funding for organisations on an ongoing basis and saves a potentially large amount of money.

In conclusion

Certino offers a compelling new way to obtain the tax intelligence you need to manage your shadow payroll more effectively and save your business a significant amount of money each year. They enable their customers to understand and manage the tax liabilities of their global, mobile workforce by automating the entire process. Certino looks after the entire spectrum of international employee movement, from pre-move planning, to shadow payroll calculation and intercompany rebilling, and ultimately posting transactions in relevant accounts – thereby providing a comprehensive employment tax management system.

RICHARD MCBRIDE

Richard is the founder and managing director of Certino, which has been formed specifically to help international businesses with complex mobile workforces to address the massive challenge of managing their shadow payroll.

Prior to founding Certino, Richard set up and led the global mobility function at Baker Hughes, one of the world’s largest oil field services companies, where he delivered more than $250 million in employment tax cost savings over eight years (2008 – 2016).

If you would like to discuss any of the issues raised in this article or learn more about Certino, please do not hesitate to contact Richard on +44 (0) 020 7118 1405 or email him at richard.mcbride@certino.com.

Alternatively, you may wish to visit www.certino.com for more information.

EMPLOYEE BENEFITS

Employee Benefits Economically it’s become very apparent over the recent past that we live in a global village; local events can, and do, have global consequences.

The 2008 UK recession was directly connected to US housing loans.

Brexit uncertainty not only impacts the UK and Europe but also business and economies around the world.

This connectivity can also be related to employee benefits with many multinational companies seeking global oversight, if not global management, of their benefit programmes.

Running a global benefits strategy is no easy task. Although management can be centralised, most benefits will need to be adapted to match local needs and expectations. In reality it is virtually impossible to run a global ‘one-size-fits-all’ benefits package. There are many reasons why this isn’t possible, but they fall into two broadly interrelated categories: • Local expectations: rewards and benefits will vary by industry, geography and culture. Historically the headline benefit in the UK has been a retirement pension with other benefits such as life insurance dependent on this. Compare this to the US where the primary benefit is healthcare and looking further afield to somewhere like India where the expectation of dependants’ cover under healthcare includes parents.

• Local regulations: alongside expectation, government regulation will often shape and drive benefit requirements and levels.

Again, we have the example of pensions auto enrolment in the UK, Australia, New Zealand and Israel. Similar arrangements are being rolled out in Denmark, Georgia, Ireland, Poland, Thailand and Lithuania.

Likewise, compulsory healthcare benefits are becoming the norm in Gulf countries and are already in place in Saudi Arabia, UAE and in the planning stages for Bahrain, Oman and Qatar.

Consequently, it may not be possible, or even desirable, to directly match benefits across national borders making global benefits’ management incredibly complex.

Benefit managers will need expert advice and guidance around creating a fluid benefits blueprint that promotes a globally competitive reward and benefits strategy, paying due consideration to the local expectations and regulations for their global workforce.

Retirement/Workplace Savings

It is difficult to have a single global retirement strategy because of the complexity and diversity of national regulation, taxation systems and providers’ global footprint.

Consistency and control may only be possible by trying to agree contribution commitments from the employer that are then managed locally, in terms of plan design and appropriate investment vehicles to suit their specific needs.

Even this strategy needs caution – some countries may not have specific pension requirements but will have as mandatory, an end of service bonus/gratuity that is often set at a month’s pay for each year worked. This might not be pensions per se, but such a structure is still a cost to the business and should be budgeted within the compensation and benefits area.

In reality it is virtually impossible to run a global ‘one-size-fits-all’ benefits package

Dubai vs Abu Dhabi, Canada etc.). Again, it is not possible to operate a single solution, but a business could set a benchmark of ‘State provision plus’ meaning all employees would be entitled to a level of healthcare supplemental to local state provision. This will vary dramatically by territory, but at least a standard is set.

Financial Wellbeing

The basics of managing money and finances are the same the world over, requiring employees to budget, borrow wisely, save and invest for their long-term financial security. But the fine details vary from territory to territory making it difficult to deliver generic financial education.

Consideration should be given to local specialists who may not be expensive and who could facilitate local education and guidance, engagement and consistency of support for a global community.

Global benefits are always going to be challenging to manage, but with knowledge, strategy and expert advice everything can be connected to everything else.

Risk Benefits

These are generally available worldwide.

Providing life insurance or accident and disability cover across global locations can be achieved. A global strategy could see the use of multiples or percentages of salary as the cover basis to avoid issues that could be caused by fixed sums insured that might be too high in lower pay countries and far too low in the developed world. Consideration should be given to the potential to improve costs and underwriting by using multinational pooling, which in addition to cost savings makes central management easier.

Health And Wellbeing

Provision varies significantly from country to country (and even within countries, e.g.

SAIRA CHAMBERS

Employee Benefits Director at Mattioli Woods Saira joined Mattioli Woods in October 2016 and has over 25 years’ experience in the employee benefits market. Over the last 15 years, her work has focused on helping multinational companies source and manage benefit programmes for their employees.

During her career, Saira has worked on both general consulting for domestic and international clients, as well as developing international business.

Visit www.mattioliwoods.com for further information.

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The Transformation Of HR And Global Mobility Roles There is no doubt that Global Mobility for many organisations has either undergone or about to go through a period of transformation. Redesigning the expected contribution from mobility is no easy task. The digital journey is a fundamental part of the debate and being digital of course, is more than simply buying or accessing mobility specific software.

The consequence of re-calibrating business models is the requirement to innovate and review the organisation’s capability to remain structured but agile. There will be pressure to undertake change for a variety of reasons; corporate cost optimisation initiatives, HR restructuring, changes in business and talent requirements and importantly a need to demonstrate more value using predictive business analytics. Whatever change is implemented requires a holistic view of how the value-chain of purpose, strategy, talent, culture, process and technology is tailored to your journey over the next decade and more urgently, what should global mobility prioritise over the next 24 months.

Every industry will have differentiated approaches to their assignment types, their employee value proposition and the way that mobility teams enable programme delivery. However, there remains a common theme–remaining relevant, being included at the earliest possible stages of planning and being valued for advisory support that enables organisation capability and competitiveness.

Global Mobility: Evolutionary Journeys

The challenge for organisations is to really understand their desired outcomes as part of the transformation process. Whilst there may well be clarity at Executive Board level, the potential for diluting the vision increases as the mandate for change is cascaded through the organisation.

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Santa Fe Relocation’s recently published Global Mobility Survey 2019 highlights that business leaders most certainly expect their mobility teams involved in critical work areas: workforce planning, advisory services and a broader risk assessment (not only compliance for the organisation but also duty of care for all international work arrangements).

Strategic supplychain management is a key player in enabling organisational change and, in many cases, work hand-in-hand with the commissioning function such as HR or Global Mobility

•

•

•

•

•

Balancing Transformation Ownership: HR Or Procurement?

Strategic supply-chain management is a key player in enabling organisational change and, in many cases, work hand-in-hand with the commissioning function such as HR or Global Mobility.

Here are some recommendations for achieving your desired outcomes.

Global Mobility Professionals

• Global Mobility and human resources

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teams should invest time in understanding their future role expectation - being strategic and tactical at the same time is unlikely to be a workable solution and importantly what contribution does the business expect from Global Mobility, post transformation?

Will this require investment in acquiring new skills and competencies - for example in strategic and talent advisory consultancy?

Establish clarity on how Global Mobility fits into the broader transformed organisation - has this been communicated and agreed with internal key stakeholders in the business? Post transformation, the business needs to be clear how and why the focus of the existing internal Global Mobility role has changed Taking time to seek the views of both suppliers, the business/line management and other industry peers before embarking on a formalised tender process, will assist in debunking ‘myths, rumours and preconceived views’ and provide a strong platform for asking the right questions and assessing the right combination of culture, people, process and technology that will build, from day one, the foundations of a successful transformation Scope - operational consistency offered by a supplier may also mean inflexibility and charging for every extra request. Ideally the new partnership will have sufficient trust and governance for a mature approach from both parties to agree when additional fees for new services or project fall outside of the contract Transformation or implementation? As we have explored, clarity and honesty by all parties on the realistic outcomes and over what timescales Success for everyone - entering a new partner relationship(s) will involve some level of bedding in the processes, workflows and preferred operational approach - this is a long-term investment not a short-term gain, although an effective transformation should yield dividends at an early stage Communicating value to the business from the transformation ensures momentum behind the change process - whether it is improved reporting, enhanced satisfaction from relocating employees or releasing time for Global Mobility teams to focus on their new organisational roles.

GLOBAL MOBILITY TRANSFORMATION

Sourcing/Procurement

• Taking time to fully understand the current and future state of Global Mobility contribution is key to supporting the selection of sustainable Global Mobility suppliers. If Global Mobility/professional services are exceptional projects for the procurement function, seeking to negotiate predominantly on price and volumes, misses the opportunity to understand the complexity of services, regional variations, available technology and competitive advantages of Global Mobility programmes

• Pricing - be aware of the relativities of the services being procured within the total programme costs. Selecting the right partner who is sustainable must be the priority and while pricing will be market competitive, why would any organisation expect their suppliers to operate on unsustainable margins? If this is the case, how will quality of service be delivered? The Global Mobility industry has gone through waves of maturity and with technology and the availability of suppliers across the continuum, the days

of opportunistic pricing in some areas of Global Mobility have not completely disappeared, however they are now the exception to the norm. Therefore, any tendering process needs full planning and education for all parties.

Conclusion

Organisations are evolving and so too are business expectations of their professionals. Increasingly, organisations will shift from functions to roles and whilst the rate of change will be differential,

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the end game is that robotisation and expectations of value creators rather than facilitators will be the mission and purpose of those employed inside the organisation. Therefore, the evolution of assessing the right cultural and technical supply-chain fit is critical. The views and models we have referenced affirm the direction of travel for professionals – and this equally applies to others in finance, procurement, marketing and so forth. The digitalised world requires one to re-learn how to thrive and grow in this fourth industrial age.

A large-scale tendering process can take a year to achieve the final decision, another six months undergoing transitionary activities and if, after ‘go live’ the operational model, service capabilities, pricing or some other significant dimension fail, will there be an audit trail as to why this occurred? If the transformation is desired over the longterm, is there a pitfall in expecting instant gratification and overlook that a partnership is evolutionary?

full report here: www.santaferelo.com/en/ mobility-insights/white-papers/effectivetransformation-in-global-mobility/ ‘Global Mobility Survey 2019 ‘REVISION: Mobility through the looking glass’ Download: www.santaferelo.com/en/mobility-insights/ global-mobility-survey/ Visit www.santaferelo.com for more information.

References: This article is based on, and uses extracts from Santa Fe Relocation’s report ‘Effective transformation in Global Mobility A board game or a puzzle?’ Read and download the

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JOHN RASON

Group Head of Consulting, Santa Fe Relocation, is recognised as a thought leader and speaker on strategic international HR, talent management and Global Mobility, John has 15 years of global consultancy experience, having previously held senior HR leadership roles in numerous global businesses across a range of industry sectors. He now works with global organisations to create value and improve the structure of Global Mobility programmes, focusing on aligning strategic objectives with operational delivery. John is a fellow of the Chartered Institute of Personnel and Development (FCIPD).

If you would like to discuss any of the themes or issues raised in this article, please do not hesitate to contact John Rason Email: John.Rason@Santaferelo.com

INTERNATIONAL HR ADVISER AUTUMN

One Size Doesn’t Fit All Make Mental Wellness A Priority For Your Globally Mobile Workforce The explosive growth in emerging markets has created a significant demand for companies to relocate skilled workers around the world, presenting great opportunities for home-grown talent to play a critical role in supporting global business strategies.

Relocating overseas can improve career prospects, skills, income and provide broader life experiences for many, and we know from our research that globally mobile individuals generally have a positive working experience. Our recent Cigna 360° Wellbeing Survey, undertaken on globally mobile Individuals, shows that three quarters (75%) are satisfied with the life they have in their current country, 63% think that working overseas has improved their personal economic outlook whilst over half (56%) have the opportunity to learn and grow (vs. 46% of general population).

However, globally mobile employees face many problems that go beyond simply being homesick. They are at risk of experiencing a less positive work-life balance than domestically-based staff for various reasons, including: • Longer working days • Differing time zones • International travel • The stress of complex higher-level management decisions heightened by cultural differences.

Just under three quarters of globally mobile employees (72%) are currently unhappy with

their work-life balance and the amount of time available to spend with family.

Lack Of ‘Duty Of Care’ Key Concern

People working overseas often worry more about their own and their families’ health and wellness than those who reside in their home country. A key concern for many globally mobile individuals is the level of care and protection provided by companies, particularly to equip them for unforeseeable circumstances. As a result, they subsequently worry about illness; with cancer and the fear of accidents the main triggers, followed by mental illness, including depression.

Whilst working overseas has its benefits, it’s clear that the reality of life in a new country can be an emotional upheaval Whilst working overseas has its benefits, it’s clear that the reality of life in a new country can be an emotional upheaval.

Working practices are different, not to mention the cultural, lifestyle and potential language changes, which can make coping with life’s challenges more difficult. In many countries, there still remains a certain stigma attached to mental ill health, which can be even more challenging.

Depending on the circumstances, globally mobile workers can also be separated from their family or may have the stress of settling children into a new school and life. It can be an extremely difficult transition and highlights just why a proactive approach to safeguard mental health needs to become a ‘must’ for all employers with a globally mobile population.

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Digital Tools Improving Employee Wellbeing

Our research shows a deep insecurity about family health and wellbeing, coupled with social isolation and increasing loneliness, which is exacerbated by the loss of a support network – major triggers for depression and anxiety.

Mental illness, including depression, is one of the top four concerns for the globally mobile sector, with just under a fifth (19%) admitting to suffering from loneliness, with this figure rising to 24% for those who are single or living alone. Many also admit to struggling with socialising out of work.

Maintaining the health and wellbeing of this constantly changing workforce can be difficult, and access to healthcare can be challenging, particularly in emerging markets. There have been many providers over the years that have delivered local based solutions for people living and working in their area. However, as an international insurer, we recognised some time ago that an international virtual healthcare solution was required so that no matter where a person was in the world, they would get a telehealth consultation with a GP or specialist in their chosen language.

It’s important to us to provide a multilingual, multi-geographical solution along with tailored clinical and lifestyle support to globally mobile employees.

There are personalised apps which can provide real-time health and wellness coaching, combined with 24/7 video and telephone consultations with doctors, nurses and healthcare specialists. With preventative care and behavioural change at the heart of apps like this, they offer collective, integrated and innovative tools that give users greater control of their health and wellbeing via online coaching.

Another great benefit available via these digital platforms are pre-departure checks where employees and their families work through a health assessment questionnaire to identify any risks or current medical factors. If any issues are identified, members are subsequently offered personalised support and coaching.

There are a number of other support services available that HR teams can support globally mobile employees with including online computerised cognitive behavioural therapy (CCBT), mindfulness programmes and wellbeing seminars and workshops covering personal and work-related wellness.

Whatever the platform, mental health and stress in the workplace are areas that

WELLBEING can hugely benefit from a digital approach.

Employers are beginning to recognise that having the right support in place and early intervention can have significant positive impact on a prognosis, reduce the cost of treatment and motivate users to become more involved in their own care, and to ultimately live a healthier lifestyle.

Help Employees Adjust To International Life

Mental health is as important as physical health when working abroad, and it should be a priority for businesses when supporting their globally mobile workforce. A company that creates a culture which promotes

positive mental wellbeing will be seen as an attractive employer that will engage and retain staff who are generally happier, and in turn more productive with increased morale.

All crucial factors to cope with the increasing pressures of a global business model.

Relocation is a very personal experience which requires a lot of support, and it’s imperative that employers pay attention to the needs of their globally mobile employees. As one of the world’s leading providers for globally mobile employees, Cigna is committed to deliver solutions to tackle this and have a created a personalised app, Cigna Wellbeing TM, dedicated to globally mobile employees.

PHIL AUSTIN CEO, Cigna Europe

MATYLDA DZADEY

Global Wellbeing Relationship Manager, Cigna Europe

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IR35 LEGISLATION

Contractor Or Employee?

Why Getting It Right Has Never Been So Important In April 2020, new IR35 legislation will come into force in the UK – this will govern the misclassification of contractors as employees to prevent tax avoidance within private companies. The rulings have caused a huge deal of debate, with some calling it the death knell of independent working practices, and others praising the strong action against nefarious employers taking advantage of their workers and legislative loopholes.

IR35 changes also come at a time of increased scrutiny of corporations utilising the flexible working practices of the gig economy, hiring what they deem to be ‘self-employed’ contractors to fulfil the services of the business. As the landscape of contracting evolves, organisations have a lot to do to bring their processes in line with responsive legalisation - but what exactly does IR35 mean, why is correct employee classification so important and how will the new rules affect organisations operating in the UK when they arrive next year?

What Is IR35?

The term IR35 describes tax legislation that aims to prevent the misclassification of employees as contractors for the purpose of tax avoidance by both the worker and the firm hiring them. Workers who are supplying services to companies via an intermediary (such as a limited company) can benefit from the flexibility of this arrangement, as well as paying lower tax and NI rates; companies hiring these contractors also benefit as they can avoid paying the employer costs and benefits applicable to employees.

The IR35 legislation deems whether these workers are in fact disguised employees with the same taxation obligations as a standard employee. Workers ‘inside IR35’ are defined as employees by the UK’s tax authority HMRC and must pay the correct amount of tax - potentially leading to a 25% reduction in the worker’s net pay.

Those ‘outside IR35’ are considered to be legitimate contractors and can continue under the same arrangement.

IR35 became law as long ago as 2000 when the Intermediaries Legislation first came into force as part of the Finances Act. In the intervening years, HMRC struggled to enforce the legislation due to its complexity and uncertainty around employment status rules, so in 2017 the IR35 revisions were announced in the hope of greater clarity and more cases being successfully brought against those abusing the system. The initial set of reforms applied solely to the public sector, but in 2020 IR35 will also change for the private sector.

From 2020, private sector employers will now be responsible for assessing IR35 status as per the public sector rules What Is Changing In April 2020?

Both the old and new legislation hinges around the classification of “deemed employees” – that is, whether the worker is truly a contractor or whether they are a disguised employee. This remains the central concern of IR35.

The newer IR35 legislation brings into force alternative tax treatments which mean that companies are now responsible for assessing the contractor’s employment status – and that they should pay employment taxes over and above the fees paid to the worker.

Currently, there are different rules for public- and private-sector companies. The public sector rulings have been in place since 2017 and indicate that the hiring company/ organisation is responsible for assessing whether the contractor falls inside or outside of IR35. If the hirer decides that the worker

falls inside IR35, tax and NI contributions should be deducted and the worker’s status reported to HMRC. In April 2020, private sector contracts will be brought inline with the public sector.

Prior to the 2020 deadline, it was the contractor’s responsibility to calculate their own position inside or outside of IR35. From 2020, private sector employers will now be responsible for assessing IR35 status as per the public sector rules.

Why Is Correct Classification Important?

Time and again, we have seen organisations misclassify their workers as independent contractors or self-employed as an easier, cheaper option or because they are unfamiliar with local laws. If the employee takes the case to tribunal and wins the ruling, this can equal huge compliance headaches for the company including fines, backdated taxes and employment contributions, and greater scrutiny of company taxes as a whole.

Recent employment tribunals have been brought against proponents of the gig economy using workers they deemed to be “self-employed contractors”, such as Deliveroo, CitySprint, Uber and Pimlico Plumbers. In some of these cases, tribunals decided that these companies had classified their workers incorrectly; as they were contributing to the success of the business and not working solely for themselves, the individuals were not selfemployed and should be provided with standard employment rights in line with UK labour law such as sick and holiday pay, working hours and breaks, National Minimum or Living wage.

With the arrival of IR35 for private companies next year, the importance of correct classification will increase further – if workers are deemed to be within IR35 following an investigation, HMRC will demand retrospective PAYE tax and National Insurance contributions dating back as far as 6 years. If underpayment is deemed to be deliberate or based on careless practices, fines can be imposed.

What Is The Criteria For A Deemed Employee vs A Contractor?

There are a number of factors which determine whether a worker is considered a contractor or

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INTERNATIONAL HR ADVISER AUTUMN

employee, such as the amount of supervision, direction and control that takes place, the way in which they are paid, the equipment they receive, whether they are engaged in contracts with more than one client, the level of financial risk they bear, whether employees report into them, how ingrained they are within the organisation and so on.

At Mauve, we use the 20-factor Test to determine a worker’s classification – the test defines a worker as a “service provider”.

The questions must be objectively and consistently applied in order to determine the worker’s correct status – if the majority of answers to the 20 questions are “yes”, the service provider is more likely an employee, and if the majority of answers is “no”, the service provider is most likely an independent contractor.

The 20 questions are as follows: 1. Is the service provider directed by the client as to when, where and how the work is to be done?

2. Is the client providing detailed instructions or training to enable the service provider to perform the work in a particular way or manner?

3. Can the service provider perform the work without any risk of direct economic loss to himself/ herself?

4. Are the services provided by the service provider an integral part of the client’s operations, like those already performed by others within established job classifications (e.g. clerical work, teaching or research)?

5. Must the services be performed specifically by the service provider (rather than someone else employed by the service provider)?

6. Will the client hire, supervise or pay others to help the service provider on the job?

7. Is there a continuing work relationship between the service provider and the client for which the services are being performed?

8. Is the work schedule set by the client?

9. Is the service provider required to devote his/her full time effort to the client for which the work is being performed?

10. Is the work required to be performed at the client’s premises, or in specific places designated by the client?

11. Is the sequence of work set by the client?

12. Are regular oral or written reports required to be submitted to the client by the service provider?

13. Is the method of payment based on hourly, weekly or monthly fees (as opposed to commission or by the project/job)?

14. Are business and/or travel expenses reimbursed?

15. Does the client furnish the tools, equipment and materials used by the service provider?

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16. Can the service provider perform the work without making or having made any investment in equipment or facilities?

17. Does the service provider perform services exclusively for the client rather than working for a number of companies at the same time?

18. Does the service provider not make his/ her services regularly available to the general public or businesses other than the client?

19. Is the service provider subject to dismissal for reasons other than nonperformance of contract specifications?

20. Can the service provider end his/her working relationship with the client at any time?

For the purpose of IR35, the best way to determine a worker’s status is to use HMRC’s online tool, available from their website – as HMRC inspectors will be tasked with proving deemed employee statuses in order to bring cases to court, their classifications and resources are the most definitive.

Tax liabilities in 2020 will be moved from the worker to whomever pays the fees – in some cases, this will be recruitment agencies. This has caused some controversy because the end client or engaging party is still responsible for assessing IR35 status – recruiters or fee-paying organisations could be liable for extremely large tax bills if end clients make slapdash IR35 decisions. HMRC have stated that if there is evidence of negligent behaviour on the part of end clients, they too may be liable to be penalised. It is therefore imperative that workers, any third parties, recruiters and end clients work together and keep constant open lines of communication to ensure correct decision-making.

Companies should be wary of simply actioning a blanket shift of all contractors into IR35 – the legislation is intricate and each case requires thorough consideration.

This type of action can result in contractors paying employee-level tax without the employment rights they are due in return.

How Will IR35 Impact Contractors?

The IR35 legislation will prevent noncompliance and associated underhand practices – it is fundamentally beneficial to all. However, the deadline is fast approaching - any organisation engaging UK contractors should make themselves abundantly understanding of the new IR35 rulings.

The tide is turning in the UK and around the world as a result of the rise of the gig economy and clamp-downs on dishonest tax strategies. Businesses should keep compliance at the forefront of their minds at all times, and ensure their classifications and internal processes are compliant to the letter of the law.

Genuine contractors should not be impacted – it is important however, to be completely clear about the factors that determine worker classification.

The most obvious impact is on those contractors who are re-assessed as “deemed employees” - this could mean that tax and NI obligations will need to be paid on their income. Deemed employees are also due certain employee benefits such as sick and holiday pay; a sudden change to full employment may be a shock for workers accustomed to the flexibility and reduced tax obligation attached to being a contractor.

The new IR35 rules will to some extent move responsibility away from the contractor and on to the engaging firm – however, contractors should remain abreast of their own situation and status so that changes do not come as a surprise. The change to employment will of course affect their limited company or any contractual relationship with a third party “umbrella” payroll company.

How Will IR35 Impact Companies Or Hirers?

The largest impact will be the shift to the engaging company having full responsibility for the assessment for IR35 status of workers. Companies who may be affected should spend the next 9 months learning the intricacies of IR35 or engaging the right support to help them make correct assessments. They will also need to put in place the correct internal procedures to ensure the right contracts and payroll arrangements, while also managing the expectations of the workers.

What Should My Next Steps Be?

ANN ELLIS

Chief Executive Officer As one of Mauve’s founders, Ann was the first and only “back-office” employee in the early days, providing services and support to telecoms projects. Today, Ann’s role as CEO is just as energetic and she is profoundly involved in the business at every level. Ann is multi-lingual and enjoys experiencing new cultures as she travels the world expanding the organisation’s infrastructure.

Visit www.mauvegroup.com for further information.

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DIRECTORY

INSURANCE AND FINANCIAL SERVICES ZURICH INTERNATIONAL CORPORATE SOLUTIONS

Tricentre One, New Bridge Square, Swindon SN1 1HN Contact: Adele Cox Telephone: +44 (0) 1793 506775 E-mail: adele.cox@zurich.com Website: www.zurich.com Zurich International Life is a global provider of life insurance, investment and protection products. Our corporate range offers flexible, portable solutions, designed to suit multinational organisations with an internationally mobile workforce. The International pension plan offers a cost effective, bundled retirement benefits solution comprising of trust services, investment funds and online administration.

International group protection is designed to protect an employers’ most important asset – their employees – and offers a range of life and disability protection.

With a local presence in key global business hubs and over 30 years experience of implementing and administering plans world wide, we’ve developed our knowledge and understanding of key markets to meet the needs of our customers and business partners.

INTERNATIONAL HR CONSULTANTS DELOITTE LLP

Stonecutter Court, 1 Stonecutter Street, London, EC4A 4TR Contact: Robert Hodkinson, Partner Telephone: +44 (0) 20 7007 1832 Fax: +44 (0) 20 7007 1060 E-mail: rhodkinson@deloitte.co.uk Website: www.deloitte.co.uk Whether you are creating your first international mobility programme for employees or addressing fundamental changes to an existing programme, our International Human Resources team can help. Deloitte provides consulting support that has an appreciation for each company’s size, background and unique cultural environment, aligning your international programme goals with corporate business strategies. Our consultants have developed deep expertise in many fields based on first hand experience with many of the world’s leading organisations: international assignment policy and process design, benchmarking, service delivery modelling, improving vendor management and helping our clients become more compliant and their administration more cost-effective.

INTERNATIONAL MOVING GOSSELIN

49 Wates Way, Mitcham Greater London, CR4 4HR Contact: Tim Daniells Telephone: +44 (0) 20 7622 4393 Fax: +44 (0) 20 7720 3897

Email: london@gosselin-moving.co,uk Website: www.gosselin-moving.co.uk Gosselin is a world leading international relocation company, serving corporate customers all over the globe with an awardwinning* move management and destination services programme.

Through our London headquarters and unrivalled footprint of 56 global offices we help clients achieve their workforce mobility goals.

Every employee we relocate is appointed a dedicated move manager, who is a central point of coordination, support and advice to ensure every part of the relocation runs smoothly.

Our goal is your complete satisfaction, and with a 97% customer satisfaction rating for 2018, we offer unrivalled quality at competitive rates. *Awarded 12 global relocation awards since 2010.

RELOCATION SANTA FE RELOCATION SERVICES

Central Way, Park Royal, London, NW10 7XW Telephone: +44 (0)208 961 4141 Website: www.santaferelo.com Santa Fe Relocation Services is a global mobility company specialising in managing and delivering high-quality relocation services worldwide.

We enable people and organisations to work, live and thrive around the world.

With ‘enabling people and organisations’, we want to make it possible for people to be where they need or want to be - enabling people and organisations.

Our core competence is relocation services that support corporations and their employees relocate and settle in a new country, assisting them with immigration, home and school, language and cultural training, managing property rentals, delivering domestic and international moving of household goods.

We provide these services to a consistent high standard, locally and globally. A key aspect is being able to manage our service delivery through Santa Fe operations across six continents.

TEAM RELOCATIONS – A SIRVA COMPANY

54 Queen Anne Street, Marylebone, London, W1G 8HN Contact: Tony Thurlow Telephone: +44 (0) 20 8955 1364 Email: Tony.Thurlow@teamrelocations.com Website: www.teamrelocations.com Twitter: @TeamRelocations LinkedIn: www.linkedin.com/company/teamrelocations/ Team Relocations is an independent company specialising in delivering fully integrated relocation, moving and other associated services primarily within the corporate market.

For over four decades, we have been delivering these services on a global, national and regional basis to many of the world’s leading multinational organisations and government agencies. Our strong reputation for high quality service and proven track record put us among the leaders in the mobility industry.

RELOCATION ASSOCIATIONS ASSOCIATION OF RELOCATION PROFESSIONALS (ARP)

9&10 Diss Business Centre, Dark Lane, Diss, Norfolk, IP21 4ND Contact: Tad Zurlinden Telephone: +44 (0)1379 651 671 Fax: +44 (0)1379 641 940 Email: enquiries@arp-relocation.com Website: www.arp-relocation.com The ARP is the professional association for the relocation industry in the UK. The ARP’s activities include seminars throughout the year, an annual conference, the publication of an annual Directory of Members and a website, which is updated regularly.

THE EUROPEAN RELOCATION ASSOCIATION (EuRA)

9&10 Diss Business Centre, Dark Lane, Diss, Norfolk, IP21 4ND Telephone +44 (0)1379 651 671 Fax: +44(0)1379 641 940 E-mail: enquiries@eura-relocation.com Website: www.eura-relocation.com EuRA is an industry body for Relocation Professionals in both Europe and Worldwide.

EuRa have launched The EuRA Quality Seal, the world’s first accreditation programme for relocation providers. This pioneering initiative provides a straight forward, cost effective audit to reflect your company’s excellence in providing relocation services.

SCHOOLS ACS INTERNATIONAL SCHOOLS

ACS International School Cobham Heywood, Portsmouth Road, Cobham Surrey, KT11 1BL, England ACS International School Egham London Road (A30) Egham, Surrey, TW20 0HS, England ACS International School Hillingdon Hillingdon Court, 108 Vine Lane Hillingdon, Middlesex UB10 0BE, England ACS International School Doha Al Oyoun Street, Al Gharrafa PO Box 200568, Doha, Qatar Telephone: 01932 869 744 Email: cobhamadmissions@acs-schools.com Website: www.acs-schools.com Contact: Dean of Admissions ACS International Schools were founded in 1967 to serve international and local communities. The schools are non-sectarian and co-educational (day and boarding), enrolling students aged 2 to 18 years. The UK based schools have over 30 years’ experience of teaching the International Baccalaureate, and ACS Doha offers an international and American curriculum.

TASIS THE AMERICAN SCHOOL IN ENGLAND Coldharbour Lane, Thorpe, Surrey TW20 8TE Contact: Simon Fitch Telephone: 01932 582316 Email: ukadmissions@tasisengland.org Website www.tasisengland.org

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INTERNATIONAL HR ADVISER AUTUMN

TASIS England's diverse student body includes over 50 nationalities and many in the school community have experienced the challenges of relocation. Along with well-established welcoming programs, families receive ongoing support as they cope with the practical and emotional aspects of their transition to life in the UK. Taught in small classes, students (ages 3–18) benefit from a balance of academics, arts, athletics, activities, and service leadership.

Excellent exam results and one-to-one college counselling enable 97% of TASIS graduates to gain acceptance to their first- or second-choice university in the UK, the US, and worldwide.

excess of 25,000 serviced apartments in the UK, Europe, USA and Canada.

When booking your serviced apartment, look for our Quality Accreditation kitemark which confirms the operator is fully compliant with all the core legal, health and safety practices and means you can book with confidence.

TAXATION BDO LLP

Suite 3, The Business Centre, Innsworth Tech Park, Innsworth Lane, Gloucestershire GL3 1DL Contact: ASAP Office Telephone: +44 (0)1452 730452 Email: admin@theasap.org.uk Website: www.theasap.org.uk Twitter: @ASAPThe LinkedIn: The Association of Serviced Apartment Providers ASAP is in the industry association representing, promoting and improving the serviced apartment sector. Our 124 members including serviced apartment operators and agents represent in

55 Baker Street, London, W1U 7EU Contact: Andrew Bailey Telephone: 020 7893 2946 Fax: 020 7893 2418 E-mail: andrew.bailey@bdo.co.uk Website: www.bdo.co.uk BDO LLP is the award-winning, UK Member Firm of BDO International, the world’s fifth largest accountancy network with more than 1500 offices in 162 countries.

We have a partner-led approach, which delivers the highest quality of service by using short, functional chains of communication to aid decision-making. Clients benefit from our fresh thinking, constructive challenge and practical understanding of the issues they face. Developing strong, personal relationships with our clients is at the forefront of our service approach.

Tax advice is just one of our award-winning services and our expatriate team give practical and direct advice, delivering solutions which suit your needs.

DIARY DATES

NOVEMBER

SERVICED APARTMENTS THE ASSOCIATION OF SERVICED APARTMENT PROVIDERS (ASAP)

OCTOBER 2019

International HR Adviser – Global HR Conference

14 October 2019 London, United Kingdom Free to attend – open to Senior Global HR professionals only.

This Conference will cover: Key Considerations For Short-Term Assignments, The Global Mobility Technology Ecosystem, Global Mobility Trends & Tax Update, Evolving Assignment Types And Emerging Markets, Brexit Update, and a Comparison of the Home & Host Country Compensation Approaches to Long-Term Assignments.

To register a place for yourself and your colleagues, please email helen@internationalhradviser.com with the names, job titles and email addresses of those who would like to attend.

Worldwide ERC® Global Workforce Symposium

16-18 October 2019 Hynes Convention Center, Boston, Massachusetts, United States of America The leaders in global workforce mobility will be networking, strategising and sharing ideas for thriving in the global marketplace. Experience new heights in workforce mobility by attending this unique programme!

Are you a corporate HR professional attending the Symposium for the first time? We invite you to be our guest and experience the outstanding opportunities for education, benchmarking and networking. Learn more and register at www. worldwideerc.org/events-directory/gws/home

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Worldwide ERC®: India Global Mobility Summit

13 November 2019 Bengaluru, India Following the success of our 2018 event, we are excited to return to Bengaluru again in 2019 for a full-day programme. The event is designed to bring perspectives from industry, academic, HR and government agency sources to inform attendee discussions and allow delegates to collaborate on current challenges and opportunities. Product demos, information and programming will focus on such core areas such as legal, technology, cultural and strategic as they impact and innovate the global mobility workforce. Learn more and register at www.worldwideerc.org/eventsdirectory/india-summit

Rethink!

HR Tech Europe 2019

November 28 – 29, 2019 Maritim proArte Hotel, Berlin, Germany www.rethink-hrtech.com Rethink! HR Tech Europe 2019 is the leading HR conference in Europe, which will bring together more than 150 Chief HR Officers and C-level HR executives and decision makers to network, connect, and discuss future trends and challenges of the industry.

35+ influential speakers will share their expertise through state-of-the art keynotes, interactive Round Tables, and World Café sessions.

Key topics include the effects of digital transformation on HR strategies, HR technologies and innovation, agile change management as well as employer branding, HR

GLOBAL TAX NETWORK LTD

Norwich House, 14-15 North Street, Guildford, GU1 4AF Contact: Richard Watts-Joyce CTA Telephone: +44(0)20 7100 2126 Email: rwattsjoyce@gtn.uk Website: www.GTN.uk Twitter: @GTN_Tax LinkedIn: www.linkedin.com/company/globaltax-network Global Tax Network Ltd is the UK member of Global Tax Network (GTN), an international affiliation of professional firms in over 100 countries specialising in global mobility tax consulting. We provide assistance to employers with the tax administration of international assignment programs and private client services to high net worth individuals, non-domiciles, professional sportspersons and entertainers.

Our consultants include members of the Association of Taxation Technicians, Chartered Institute of Taxation, and US Enrolled Agents.

To advertise your services to our Global HR readers in this Directory please email damian@internationalhradviser.com for further information.

analytics and enterprise mobility.

Rethink HR Tech Europe offers exclusive access to HR decision makers, their projects, and the challenges they face. Participants at Rethink! HR Tech Europe will also get the chance to discuss about the current trends, future technologies, as well as the latest innovations in the HR sector.

For the full programme or to book to attend, refer to the event website www.rethink-hrtech.com For more information about the event, get in touch with: Barbara Brouwer, Marketing Manager Phone: +49 (0)30 52 10 70 3 - 202 Email: Barbara. brouwer@we-conect.com

Worldwide ERC®: São Paulo Mobility Summit 2019

26 November 2019 São Paulo, Brazil Worldwide ERC® will return to country’s most populous and capital city for a one-day event that will bring perspectives from industry, academic, HR and government agency sources to inform attendee discussions. A combination of panel presentations and roundtable discussions on specific topics will enable delegates to collaborate on current challenges and opportunities. Learn more and register at www.worldwideerc.org/ events-directory/sao-paulo-summit

If you would like to advertise a conference or exhibition on our Diary Dates and on www.internationalhradviser.com please email damian@internationalhradviser.com