Global mobility in the NHS
08 August 2018
Public sector organisations are increasingly faced with the problems of dealing with a global workforce where employees are becoming more agile and expectations of mobility are routine. This is particularly true for the NHS which employs 1.7 million people across the UK. It is the country’s biggest employer and ranks at number five globally.
Who works for you?
It's not unusual for UK employers to have employees who spend some of their time working overseas or have overseas based individuals spending time providing services in the UK. Often these are not formal postings to the UK as visits can be ad hoc for example, periodic trips to the UK to participate in joint research projects. In the NHS, overseas hires tend to be for the more critical posts in specialist areas and are expensive to make happen. These posts can include senior registrars, specialist consultants to fill specialist skills gaps and research scientists to share or gain knowledge.
Because of the informal nature of these arrangements, often no consideration is given to potential tax, social security or immigration costs or implications. This can result in misunderstandings around the obligations that fall on the employer.
From our work with clients in the public sector we’ve seen a number of issues arise:
1. Cost/budgeting implications
Unexpected costs, like host country tax and/or social security liabilities, associated costs of additional payroll and reporting obligations, plus potentially interest and penalties are constantly arising.
In the NHS we have seen this arise in the area of medical research as the nature of the research impacts whether a tax exemption is available. In a recent example our client had an employee undertake post-doctoral research for a 2 year period in the UK. The NHS Trust understood this research would meet the qualification to be exempt from UK tax. However as an exemption was not available there were additional employer costs including the setting up and running of a UK payroll and employer UK National Insurance at 13.8% on the earnings received during the 2 year period. None of these costs had been budgeted for.
Many Trusts are now offering incentives to foreign nurses to overcome a staffing crisis in the UK. Return flights to the home country, payment of professional subscriptions, visa costs, English exam costs and subsidised accommodation are all on offer to new candidates. These are new costs for Trusts again which may not have been budgeted for. If not structured properly these incentives could also have a tax cost attached to them and some Trusts may be unaware of this.
2. Operational issues
Increasingly we are seeing cases of individuals not being able to carry out the job they’ve travelled to do because they are not compliant with local regulations. This is becoming more prevalent as information exchange between government bodies such as HMRC and border control is improving.
The most recent example that highlights this in the NHS is the resulting impact of the cap on the number of tier 2 visas being issued to doctors from non EU countries. A recent newspaper article even revealed a number of hospitals who have all been blocked from recruiting the quota of individuals required due to visa restrictions. While the visa restriction are to be relaxed this has resulted in serious gaps in rota’s in certain specialties which have been described as ‘challenging for patient safety’. In addition, it places additional pressure on current resources with individuals working overtime and locum medics being brought in with consequential cost/budgeting implications.
3. Reputational risk issues
With the rise of social media, organisations are only ever a few clicks away from potential reputational damage. Increasingly failure by employers to understand and meet compliance obligations in respect to their employees means adverse publicity and potential damage to reputation.
Avoiding the pitfalls
If you have concerns that there may be impact for you, here are our suggestions as to the first "checks" you should take if you want to avoid becoming the next ‘war story’:
- Do you know and have a means to track all individuals coming to/from the UK who may be considered as meeting the criteria of having work duties overseas?
- Do you understood any compliance requirements you may have for these individuals?
- How confident are you that you have the carried out the appropriate processes and checks to know you are fully compliant in all of the jurisdictions where these individuals perform duties?
- How regularly do you review the above to ensure your information is up to date with overseas regulatory, tax, social security and payroll changes?