RELOCATION BLOG
Are you relocating employees to the UK? Here we try to make the subject of relocation taxation a little clearer for you to understand.
If your organisation is considering relocating an employee to the UK or is already contributing towards employee relocation costs, the organisation will incur certain tax, National Insurance and reporting obligations, so you need to be aware of which relocation costs incur tax and what needs to be reported to HMRC.
The Government adverts tell us that "tax needn't be taxing". Well it is and UK domestic employee relocation costs are no exception. The subject of tax is almost as confusing as the British electorate but here we will try to make the subject a little clearer to understand.
If your organisation contributes towards employee relocation costs, the organisation has certain tax, National Insurance and reporting obligations, so you need to be aware of which relocation costs incur tax and what needs to be reported to HMRC. In terms of the technicalities of reporting, you can very happily leave that to your accounts department to deal with.
If you engage the services of a relocation management company, it wouldn’t be unreasonable to expect them to have the capability to manage cases competently and efficiently, would it? These days, most relocation companies use some kind of software to help them do this – relocation can be a complicated affair, often with many ongoing tasks to juggle, and you just can’t trust somebody’s memory to get it all right, however good the staff member. As for paper-based lists, they are long gone, especially for a truly cloud-based organisation like Celsium.
Travelling with your children in tow can, at times, be challenging. Especially if taking to the skies. Ah, the times I have asked myself, as our youngest little darling screamed and wailed for no apparent reason, why we can't just put them in the hold with the luggage and pick them up from the carousel at the other end - but then I remember that I would surely fall foul of the inevitable air crèche investigation... Sorry, I know that was as painful as flying with Ryanair but I just couldn't resist it.
Official figures have measured new record highs (I know, it is hard to believe we are hearing this again...) for average house prices in the UK, with growth of 6.1% over the past year. The Office for National Statistics (ONS) measured a jump of £1,000 in the typical cost of a property between August and September. It left the average price at a new peak of £286,000.
This may be "good news" for the property industry, but it's not so great for home buyers, especially first-time buyers who traditionally drive the market.
Indeed, if it ain't broken, don't fix it, as the old adage goes. Why go and create extra work if everything is working just fine and dandy?
Well, you may have read our earlier post about points you should consider for your relocation policy, and top of the list was, you guessed it, policy review. In a nutshell, if you don't review your policy, how the heck are you going to know if it is "broken" or not?
I love this industry – despite not even knowing of its existence until my first day on the job. Why do I love it? The people, the relationships, the creativity and also being a people pleaser certainly helps as it is at the core of everything we do.
We wrote a piece recently entitled 10 things you should consider for your domestic relocation policy and we think it only fair to extend something similar to those of you dealing with, or just starting out, with international assignment policy.
There are 100 ways to carve a pumpkin and you don't have to do all of this - there are just a few pointers to get you thinking about how you could structure your policy and what you might include.
The Greater Birmingham Quarterly Economic Survey Q3 2015 has been released and it is encouraging to note growth in both the manufacturing and service sectors.
Both areas commented that they expected their workforce to increase over the next three months but it is interesting to note that a large majority of firms advised that they had experienced difficulty in recruiting staff.
Recruitment difficulties rose marginally with 72% of firms reporting difficulties compared to 70% in Q2.
Love it or loathe it, your relocation policy is an evolving beast. At least it should be. When was the last time you reviewed your policy?
When?!?! Tut tut.
I have worked with some companies that review their relocation policy every year and I have worked with others that haven't reviewed their policy at all. An annual review is probably a bit over the top, but to never review your relocation policy could be damaging to your business.
Every now and again we come up against queries like, "Well, I had a look online and if I book the hotel directly, I can get it a little cheaper..."
It's probably the one question that relocation companies fear the most. I always wonder why exactly relocation companies sweat so much when confronted with this question.
What have they got to hide?
In very general and simplistic terms, the purpose of a relocation programme is to relocate talented employees for the benefit of both the employee and the organisation. This could be for any of the following reasons:
You may have seen our previous post "What is a group move?" that gave a brief overview of corporate group moves. What we hope to do achieve in this post is to give you an idea of how to administer a group move and some of the areas you should consider. Needless to say, group moves should always be administered in conjunction with a specialist relocation management company to ensure that the correct advice and support is provided every step of the way.
You may have seen a previous post "So what exactly is employee relocation and global mobility?" that gave a brief explanation of what employee relocation is and what it entails. Organisations moving a number of employees from A to B at the same time, or over a defined period of time, perhaps in waves, undertake what is known as a "group move".
So a group move is when an organisation just carries out a lot of relocations, right?
Wrong. When a group move is carried out, the company might be moving the whole company, a department, or even just a handful of employees. This might be within the same country or even cross-border, which brings its own unique set of challenges. The need to move a group of employees can vary depending on the requirements of the business, and these must be taken into account when planning the move, administering the services and dealing with employees.
But apart from the volume, is it just the same as standard relocation?
For whatever reason an organisation decides to conduct a group move, it can cause a significant impact well after the actual move has been completed. Imagine you have lived somewhere all of your life, and your employer suddenly announces that the whole department is relocating 500 miles away. I have seen this happen in a group move from Reading to Aberdeen. You have a working spouse to consider, and a couple of kids at school. This kind of announcement isn't exactly a spoonful of sugar and raises plenty of questions; Do I have to go? If I didn't go, could I find another job here? What about my husband's job? Will my son be OK when he takes his exams next year? Will I be out of pocket? Such a period can be hugely unsettling for employees, so exact planning and preparation, as well as an empathetic approach, are fundamental to a successful group move.
So which services do we need to consider in addition to our standard relocation?
The core services for a group move generally remain the same as for standard moves, though the way in which they are delivered and managed differs. The greatest difference you will see to the everyday relocation offering is through the addition of the following services:
Policy consultancy
Cost estimates
Accompanied area tours
Information sessions
Information rooms
Group move clinics
Dedicated group move website
You might also find you need to make some changes to your relocation policy and may even create a distinct group move policy. You need to ensure that the offering is cost-effective but strong enough to encourage your chosen employees to relocate to the new location.
Effectively selling the new location to your workforce can also be a major challenge but we shall look at that another time.
Why do organisations carry out group moves?
Usually, the decision to group move is the result of a requirement to reduce costs long-term. For example, consider the BBC's move out of London into Salford, or Deutsche Bank's transfer of staff from London to Birmingham. Both examples are clearly aiming to reduce overheads, generally through property and salary cost savings, but companies may opt to relocate to a region with a lower tax rate and make savings that way, e.g. Zug in Switzerland has a low corporate tax rate in order to attract business into the region.
Secondly, an organisation may relocate to be near to other industry hubs and can thus draw on the talent pool more readily, e.g. the technology hub in London’s EC1V postal district and "Silicon" roundabout, or the biotechnology hubs in San Francisco and Boston.
Undertaking a group move can be a costly business, so it is not a decision that should be taken lightly - there has to be a return on the investment.
We will shortly look in-depth at how a group move could be administered, so stay tuned.
Celsium is a relocation management company, head-quartered in the UK and providing relocation services globally to businesses relocating their employees.
A full suite of relocation services is offered to fulfil the requirements of businesses and relocating employees, both domestically within the UK, and internationally to and from any location: orientation, homesearch, tenancy management, departure services, temporary accommodation, marketing assistance, purchase assistance, housing cost differentials, school search, area information guides, cultural training, language training, furniture and appliance rental, immigration, moving, expense management, group move management, policy build and benchmark, recruitment and tax services.
For more information about relocation and relocation policy, please email us.
It always surprises me just how many people I meet that have never even heard of employee relocation, let alone administered or benefited from it. Misunderstandings are common. A recent interlocutor thought it was about moving employees to a new work site from one that was closing down. To a degree, he was right, but that's only part of the picture. And when I start talking about global mobility, people look at me, slightly puzzled, and say, "What, mobility scooters?" For the avoidance of doubt, we don't do mobility scooters. Let's have a quick look and find out what it's all about.
The Telegraph recently ran an article about the bureaucratic difficulties a family encountered when relocating to the US. Here's how the article started:
Having a baby, renting a house, hospital visits: everything is more tricky when you're an expat in America, as one reader found.
When you move abroad, you expect some bureaucratic befuddlement. You’re setting up from scratch in a country whose systems and procedures you don’t know.
Celsium provides end-to-end relocation management services to organisations whilst applying our core values of Respect, Integrity and Empathy to the people we come into contact with, the communities in which we operate and the environment around us. We aim to provide services globally through an extensive network of accredited partners. We strive to be cost-effective for our clients through our industry-original business structure. We aim to provide superlative quality services by our highly motivated and talented employees.
When setting up Celsium, we decided that we wanted to be the best at what we did, which is a tiny bit of a cliché, admittedly, but that was, and remains, the genuine aim of the company. However, saying you are going to be better than the competition requires a lot more effort than just making a statement to that effect, so we set a number of objectives to help us on the journey to meeting our mission. Of those objectives, the following stood out whilst we were fleshing out the company structure:
Partnering with local experts
Offering a broad range of flexible, bespoke services
Managing and minimising risk
Vigorously controlling costs
Partnering with local experts has enabled us to provide excellent services in almost every location imaginable. We aren’t going to claim we have Celsium employees on the ground in every region, or in Paris, Istanbul or Shanghai, because we don’t. The reason why we don’t is simple - because we don’t need to as there is no tangible added value. For somebody moving to Paris, it makes no difference whatsoever whether their relocation is managed from Aberdeen, Paris or Tokyo. As long as time zone differences are accounted for, it really doesn’t matter where in the world our Personal Coordinators are based – they are the ones managing the relocation, coordinating the various activities and ensuring the sequence of pre-planned events plays out as expected. Local support, e.g. current advice on the state of the rental market in Hong Kong, is outsourced to those that know it best – the local experts we have selected to support your employees. We could claim to be rental market experts in Hong Kong and attempt to provide suitable advice based on second hand information, but in all honesty, who really knows the Hong Kong market best; somebody in the UK running Google searches to find relevant information to pass on, or somebody in Hong Kong working within the rental sector?
We thought about our service offering in depth as we wanted to stand out from the crowd a little. Rather than just providing the bog standard set of services, we wished to support our clients with some additional services and also enhance standard services. Of course, supporting your clients with slightly different services requires knowledge in those areas and we didn’t feel we were in a position to recruit and manage employees to provide those services. Would you interview, recruit and manage an employee providing tax advice if you didn’t have knowledge of tax? So again, we decided that outsourcing was the most appropriate model here, and this has allowed us to provide our customers with the flexibility of a broad range of services from which to choose. It has also allowed us to provide an industry-leading Tenancy Management service, as every member of our tenancy team is ARLA* qualified and attends regular training updates.
*The Association of Residential Letting Agents is a professional body for letting agents. ARLA was formed in 1981 as the professional and regulatory body for letting agents in the UK. ARLA raises standards within the letting and property management profession through qualifications and training, offering a range of specialist short courses and the Technical Award in Residential Letting and Property Management qualification. www.arla.co.uk
Minimising risk has become a hot topic of late, and rightly so. Gone are the days of it being viewed as merely a tick box exercise. With the rise and prominence of social media, organisations face increased reputational challenges as their laundry is publically aired. Following on from an actual risk assessment, one of the ways in which an organisation can minimise risk is to ensure it is compliant, i.e. with legislation, good industry practice and described processes and procedures. Managing this in a business can be a laborious task if the work is carried out by directly employed staff, but if areas of work are outsourced, it is fair to say that those to whom the work has been outsourced will be more expert in that field than your organisation and can better manage the processes and risks on your behalf. Celsium has placed its trust in a number of outsourced partners who are highly knowledgeable and compliant experts in their own field, and in order to maintain high standards and high levels of trust, we carry out periodic compliance assessments under the ethos of continual improvement and due diligence. Had we opted to perform these services in-house, our staffing costs would have been significantly higher and we would have had the additional burden of providing specialist training and additional audit activities, but as it stands we are able to pass these cost savings to our clients.
Following on from the point above, what do you have to consider when employing a specialist team member? Well, it’s quite a list when you sit down and think about it. Here’s a little list of activities that will use an organisation’s valuable resources:
Creating a job description
Advertising the position
Interviewing several candidates, some more than once
Updating candidates on the outcome of their interview(s)
Issuing a job offer
Dealing with new starter paperwork
Setting up the new employee on company systems and payroll
Creating an induction and training plan
Providing in-house training
Providing specialist external training
Conducting periodic training reviews
Issuing permanent position after satisfactory probationary period completion
Conducting internal audit of processes the employee is following
Creating post-audit improvement plan
Implementing improvement plan
Providing ongoing training
You get the idea – and that’s just a short list off the top of my head. And remember, you can only provide quality in-house training if sufficient knowledge exists within the company and you have sufficient written resources (hard copy, soft copy or online) to which the employee can refer.
The other option is to outsource the position to a specialist organisation with solid experience of working in that sector. E.g. we could have recruited a team of tenancy managers to handle our lease negotiations and manage all of our corporate tenancies, but we would have had to follow the steps above at considerable (ongoing) expense. Lettings legislation in the UK is ever changing so refresher training courses are paramount to providing a top class tenancy management service. You can see the costs mounting up and of course, these costs are passed to the client in one way or another. By outsourcing this work, Celsium is able to reduce the costs of its overheads and pass these cost savings to our clients. In today’s market of bottom line scrutiny, cost control is paramount and any saving we can make for our clients is passed on.
Naturally, we look at cost control across the board, not just at the relocation services we provide to our clients. Our business model allows us to control and minimise costs (and risk) in every single department, including IT, Finance, HR, Sales & Marketing and Operations, a benefit that is ultimately enjoyed by the client.
Celsium is responsible for the coordination and management of all outsourced partners to deliver our services. The Personal Coordinator’s role is to understand the relocation policy, processes and our systems and manage all relocations and arising situations, tracking and following up on all due tasks via our relocation management software. Celsium bears ultimate responsibility for the overall management of each relocation so we select and manage our outsourced partners to deliver a service with the same level of respect, integrity and empathy that we deliver to our clients.
There will be opponents to outsourcing as for every fan there is a critic, but Celsium sees the enormous benefits of outsourcing, particularly for specialist, regulated functions. Ultimately, we want to provide the best services for our clients at the most effective cost, and outsourcing helps us to achieve these goals without compromise.
Well, the votes have been cast and counted and the results are in. The UK has woken up scratching its collective head at what has probably been the most unusual and surprising election campaign in our history. I suppose we must congratulate the winners, particularly the SNP in Scotland where the voting sentiment has been particularly decisive. Milliband is a crushed man, Clegg is nowhere to be seen, Farage is probably in the pub, and Cameron is an adrenalin pumped cat with nine lives. I just hope the Queen remembers to order enough cucumber sandwiches as she unexpectedly makes her way to Buckingham Palace from Windsor Castle.
So, what is the lesson in all this? Never make assumptions. My dear mum used to say, "Never assume; it makes an ass out of (yo)u and me." I've lost count of how many times she said that over the years, but I learnt to deal with facts, and this is never more important than when somebody is relocating.
Relocation can be difficult and stressful, which is where a relocation management company shows its real strength, but every relocation is unique and every relocating employee has his or her own set of specific requirements. It is our job to extract the relevant information so that we can understand these requirements, understand the sentiments of the relocating family, and then provide appropriate support, both in terms of the relocation services we offer, as well as the emotional comfort we lend our customers. And we do this by asking the right questions right at the start of the process, and recruiting excellent people who engage with our core values of respect, integrity and empathy.
I have been raising money for local charities for 3 years now and I am very pleased to say that collectively, my family, friends and I have raised more than £25,000, which is an amazing achievement. Much of the fundraising have been done by us tackling challenges that have pushed us in ways that we never thought imaginable. We are by no means a super fit family and there were not many of us who smiled at the thought of running a half marathon, climbing a mountain or organising a fundraising day with just a couple of weeks notice. But did we say "yes", of course we did. Why? Because we did not want to let each other down and we wanted to achieve something to help others.
As a relatively new and amateur runner, the thought of a lengthy run of any kind always fills me with so much dread, so why do I keep putting myself through it, I often ask myself? I always come to the same conclusions. Firstly, because I want to support a local charity by raising awareness and hopefully getting my wonderful friends, colleagues or family to sponsor me, but I think more than anything it is because I do not want to let anyone down.
Now, last weekend, not only did I give up my Saturday night (which is often spent drinking a glass of wine or two with friends) but I knew that I would have to give up the remainder of the UK bank holiday weekend because of the pain I would feel. I completed the Lichfield Half Marathon with my friend, Janine. Did I do enough training? Of course not. Did I eat properly the night before? Of course not. You see there is a pattern forming here?! But did I want to let my friend down? Of course I didn't.
Sunday morning came around after what felt like only two hours' sleep. It was raining and I woke up late but after eating a Weetabix I felt ready to give it a go, so I jumped in the car and headed to Lichfield. I completed the same half marathon last year in 2 hours 30 minutes - not a great time but for someone who smokes and does not participate in any form of regular exercise, but I didn't think it was too bad. I had actually taken 20 minutes off my Birmingham Half Marathon time so I was pretty chuffed. I expected to finish in a similar time and, being a little competitive, I wanted to complete this half marathon quicker than I had last year.
Janine and I were at the start line, sports watch and iPhone app at the ready to record our time as the run began. A short time into the run, less than 2 miles in-fact, Janine, who suffers with asthma, began to feel unwell and struggled with her breathing. Janine had trained for the half marathon but we have no control over what our body decides to do on the day and Janine's lungs had decided that today was the day that they didn't want to work properly.
As I have already mentioned, I am competitive and each half marathon I have run (4 now) I have always beaten my previous time. I didn't want this to be any different. But could I leave my friend, and let her struggle on alone? Girl power and all that! I couldn't do it. The thought crossed my mind several times and especially each time Janine told me to carry on without her and to go on ahead. I wanted to stick with my friend and not let her down, despite the fact that I felt that I was letting myself down by not getting a better time and pushing myself.
The constant stopping and starting during the 13.1 miles allowed me time to think about why I was going against my natural instinct to do better and to push myself, and my conclusion was that, despite my competitive nature, I was responsible for making sure Janine was OK and supporting her to the end of the run. We give up so much of our lives, both in work and socially, to make others happy, that this was in-fact my natural instinct, even though I thought my competitive streak would take over and I would run ahead and finish in a quicker time.
Anybody in the relocation industry understands the need to keep people happy despite it sometimes being at a detrimental effect to our own happiness. How many of us have worked over our contracted hours to finish a client proposal, missed dinner with friends or family to ensure an RFP is finished on-time and checked our emails before switching off the bedroom lamp at night to make sure that there isn't something urgent that has come in from a client or colleague?
Our willingness to succeed and support our friends, colleagues and clients is so powerful that we really will bend over backwards to achieve our goals and manage their expectations. Everybody I know in this industry are people pleasers and we will do our utmost to support each other to ensure the end client is happy, content and settled. We sometimes think that how we behave outside of work is different to how we are during the 8 hours a day we are (officially) in work, but lets be honest - we aren't at all. We are all determined people, with an ambition that drives us all forward and yet our appeasing attitudes simply mean that we will do anything it takes to make an individual happy and this is why we are in the industry we are in. We are bloody good at it, we are experts at what we do and we will continue to drive forward to deliver services to our clients that means that they can settle into their new jobs and locations without stress and worry. So well done us, and well done Janine for fighting through the pain of running a half marathon with broken lungs and finishing - getting over that finish line was a huge achievement for everyone, especially my friend.
We finished the half marathon in 3 hours and we are still suffering this morning, three days after finishing, but do you know what? It was so worth it. Just like checking your email at 22:30 to find an assignee struggling with their internet connection, or HR having a problem with an immigration application - it's worth responding, letting them know that someone is there to support them, no matter what. Go us, go people pleasers, even rubbish lungs will not stop us because when you have determination and a drive to succeed, nothing will stop you.
Hello World! We are excited to finally announce the official launch of Celsium. We are here to provide dedicated, personally coordinated destination services to any country in the world - with the exception on South Sudan - but hey, if you need services there then we will get our supply chain team straight on it. Please check out our blog for regular updates on immigration, relocation services, world news and of course snippets on the thoughts and views of the Celsium team. Contact us at anytime...we look forward to hearing from you
