Case studies
Client: A global logistics company
Summary: The value of a compliance audit
IPM was instructed to manage an expat assignment programme for a global logistics company but while reviewing payslips to help work out pension and NI contributions for assignees, a number of discrepancies appeared. The more IPM dug, the more discrepancies they found and finally persuaded the client to undertake a detailed compliance audit. There were anomalies in nearly all the payroll/HR files reviewed for overseas assignees.
As a result of the detailed audit it transpired that some assignees were owed money by the client; others owed the client money; and significant underpayment to the HMRC had to be resolved. The company’s tax exposure following the compliance audit of 50 international assignee files looked like this:
- assignees overpaid by - £102,590
- NI owed to HMRC - £70,390
- Pension owed to provider - £14,547
- Refund of income tax due - £10,705
Client: International financial services company
Summary: To tax equalise or not? That is the question
When an international financial services company decided to post an employee into Australia for 18 months, they decided they wanted to offer a local Australian contract without thinking through the implications (ie: type of visa, social security and so on). IPM asked whether his UK contract was being terminated and the assignee re-employed by the company’s Australian operation? The answer was he was being seconded and the situation reviewed after two years. This response impacted the structure of the package.
IPM was then approached to prepare a similar package for another assignee going to Australia - this time for 12 months straddling two UK tax years. Due to the timing and length of the assignment this would effectively mean he would be paying UK tax for the whole of the secondment as well as Australian taxes.
IPM raised this and suggested that by extending this assignment by two months it allowed him to break tax residency in the UK and receive the same treatment as his 18-month colleague.