Future of work | Review of hybrid and distance working

Published on 26th Sep 2022

On 31 August 2022, the Office of Tax Simplification (OTS) launched a review of hybrid and distance working, looking for evidence of trends in relation to increasing numbers of people choosing to work in different ways (including across borders)

The review is also considering whether the tax and social security rules are flexible enough to cope, and what organisations are experiencing as new ways of working become business as usual.

The issues to be covered include:

  • Working across international borders, and what that means for things like tax, social security, tax residence, and permanent establishment.
  • How accommodation, travel, and other expenses work in a hybrid world, including who will pay and whether permanent workplace rules make sense.
  • Application of short-term business visitor rules, overseas workday relief, and modified payroll.
  • The treatment and impact on pension contributions and share schemes.
  • The risks or otherwise of creating permanent establishments or even changing corporate residence.

The OTS has invited responses on a wide range of questions, in particular from employers on their experiences of how working arrangements have changed from before the coronavirus pandemic. Where are employees now working – wholly remotely, hybrid or wholly in the office – and does this vary by seniority or role? Has this given rise to any tax or payroll compliance challenges?

The consultation closes in late November 2022, and the OTS indicated that it intends to publish a report of its findings in early 2023.

The Chancellor announced in his fiscal event on 23 September 2022 that the OTS is to be abolished, and instead the government will embed tax simplification into the institutions of government.

Given that hybrid and distance working represent the future of work, this is a timely review that we hope will lead to some changes in the tax rules (notwithstanding the abolition of the OTS).

Please get in touch with your usual Osborne Clarke contact or one of the experts below if you have any queries or would like to discuss further.


* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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