Important Update for Overseas Directors of UK Companies

6 January 2025

Important Update for Overseas Directors of UK Companies

The UK is introducing significant changes to its border control measures that will affect overseas directors traveling to the UK for work. These updates aim to improve compliance with tax obligations and enhance HMRC's ability to monitor workdays spent in the UK.

Key Changes to Note:

1️⃣ Electronic Travel Authorisation (ETA):
Effective from 8 January 2025 for non-European passport holders.
Effective from 2 April 2025 for European passport holders.
ETA will create a digital link to passports, enabling automatic logging of arrival and departure dates.

2️⃣ PAYE Tax Obligations:
Non-resident directors are classified as office holders.
Any salary or fees for duties performed in the UK are subject to PAYE tax—even for a single day of work.

3️⃣ Self-Assessment Requirements:
Non-resident directors earning income from UK directorships must file UK tax returns and adhere to deadlines to avoid penalties.

4️⃣ National Insurance Contributions (NIC):
Directors and their employers may be liable for Class 1 NICs on earnings linked to UK duties, with some concessions potentially available.

5️⃣ Double Tax Treaties:
Most treaties do not exempt non-resident directors from UK tax on earnings for UK duties.

6️⃣ Expenses and Benefits:
Travel and accommodation expenses for UK duties are taxable, even if paid by an overseas entity.

Why This Matters:
The new digital border control system will automatically log arrival and departure dates, and HMRC will have access to real-time data. This enhances compliance monitoring, ensuring proper reporting of UK earnings and expenses.

How to Prepare:
Review PAYE, NIC, and self-assessment compliance for directors performing duties in the UK.
Ensure directors are aware of these changes and their obligations.
Consider appointing a nominee director for the UK business if appropriate.

For more details on visiting the UK for business purposes and the new Electronic Travel Authorisation (ETA), visit the official UK government page here: GOV.UK

At entreprenör, we’re here to help you navigate these changes. Whether it’s payroll setup, tax compliance, or understanding the new regulations, our team is ready to support your business.

Reach out to us today to ensure you’re prepared for 2025 and beyond!