10 September 2026
What UAE-based executives and their employers need to know about UK tax
Many of our clients initially assume that because they are employed under a UAE contract, their UK trips have no UK tax implications. However, this is not the case, and it is this issue that HMRC have recently brought into sharp focus.
On 13 August 2026, HMRC published new Guidelines for Compliance specifically covering short-term business visitors to the UK, reference GfC19.
These guidelines are not a change in the law. The underlying rules have existed for many years and are set out principally in section 27 of the Income Tax (Earnings and Pensions) Act 2003.
These newly published guidelines signal that HMRC is actively focusing on this area and expects employers and employees to get it right.
This article is relevant to UAE-based executives and the companies that employ them.
The short-term business visitor rules apply to employees. This includes employees of overseas companies, not just UK employers. The identity and location of the employer is irrelevant to the employee’s UK tax position. What matters is where the work is physically performed.
This is equally relevant to individuals who have recently arrived in the UK and are still being treated as short-term visitors by their employer, as the same rules apply from the first day UK duties are performed.
Section 27 ITEPA 2003 is straightforward on this point: if you are not a UK resident but you physically work in the UK, the pay relating to those UK days is subject to UK income tax. This applies from the very first day.
Being employed by an overseas employer, paid into an overseas bank account, or based in a country with a lower tax rate does not change this. The deciding factor is simply where the work is physically performed.
Let’s consider Steve, a UAE-based Regional Sales Director at a multinational firm. He flies to the London office ten times a year, each trip lasting two or three days, attending client presentations and strategy meetings. His total UK working days in the tax year come to around 25. Under UK domestic law, the earnings attributable to those 25 days are subject to UK income tax.
The UK-UAE Double Taxation Agreement can eliminate this liability, but only where the employer has no UK presence at all. Steve’s employer has a London office. That alone is enough to disapply the exemption, leaving Steve with a genuine UK tax liability on his UK working days.
Where an employer has a UK presence, it is generally required to operate PAYE on any employment income paid to a visiting employee from the first day UK duties are performed. This applies even in cases where the employee would ultimately owe little or no UK tax, for example because a double taxation treaty reduces or eliminates the liability.
In Steve’s case, treaty relief is not available because his employer has a London office, so both the tax liability and the PAYE obligation apply in full.
Without the right arrangements in place, the employer is exposed to penalties and interest for failing to operate PAYE correctly, regardless of whether any tax was ultimately due.
For the employee, an employer getting this wrong can also create unexpected complications in their own tax position, including underpayments that HMRC may pursue directly.
There is a further complication in that double taxation treaties do not cover National Insurance contributions. Unlike income tax, NIC obligations are governed by social security agreements between countries, and the UK does not have a social security agreement with the UAE. This means that UAE-based employees performing duties in the UK may incur UK National Insurance contributions under domestic rules, and their employers may incur corresponding employer NIC obligations. This applies regardless of whether the employee is exempt from UK income tax under the DTA.
The good news is that HMRC offers two arrangements specifically designed to reduce the administrative burden for employers managing these obligations.
The first is an EP Appendix 4 arrangement, which gives qualifying employers a much simpler way to handle their PAYE obligations for visiting staff, replacing individual payroll runs with a single annual report to HMRC. The arrangement comes with two useful concessions worth knowing about. First, where an employee spends between 31 and 59 days in the UK, PAYE can be disregarded entirely, provided the employer can confirm there is no formal employment contract with the UK employer and that the visit does not form part of a more substantial period of UK presence. Second, where the employee spends fewer than 60 days in the UK across linked visits, even where those visits span more than one tax year, HMRC will generally disregard the fact that the UK company bears the cost of the employee’s remuneration, thereby removing what would otherwise be a barrier to using the arrangement.
The second is an EP Appendix 8 arrangement, which allows employers to operate PAYE on an estimated basis throughout the year with a single annual reconciliation, significantly reducing the administrative complexity of managing multiple short-term visitors.
Both arrangements require prior agreement with HMRC and are not automatic. Employers with staff who make regular UK visits and do not have one of these arrangements in place should seek advice as a matter of priority.
Finally, it is worth noting that the number of days spent in the UK matters beyond the STBV rules alone. Under the Statutory Residence Test, introduced by Finance Act 2013, Schedule 45, accumulating UK days brings an individual closer to triggering UK residence. Once that threshold is crossed, the analysis changes entirely: a UK resident is taxable on their worldwide income, and what began as a short-term business visitor issue becomes a full-residence problem. Careful day counting and a clear understanding of where an individual stands under the SRT is therefore essential for anyone making regular UK visits.
At Hodgens Global, we work with UAE-based executives and their employers on exactly these issues. From establishing the correct treaty position and NIC obligations, to putting the right arrangements in place before the next UK trip and always keeping an eye on the UK or foreign residence position to ensure there are no surprises later.
Making regular business trips to the UK from the UAE? Get in touch, and we’ll make sure your position is correctly structured before it becomes a problem.