I just want to thank everyone for joining us today. I’m Steven Bostock and I’ll be your host. This is a Mishcon Academy Digital Session, a series of online events, videos and podcasts looking at the biggest issues faced by businesses and individuals today.
The concept of working at a fixed desk within an office has been in decline for some time now. Even before the pandemic Forbes reported more than 70% of people around the world used to work remotely at least once a week.
Today I’ll be joined by my colleagues, Natalie Loader who’s an Associate in our Immigration Group; Neil Shanghavi, a Managing Associate in our Immigration Group; Charlie Sosna, a Partner in the Tax and Wealth Planning Group; Dominic Boon, a Managing Associate in Employment and Tom Grogan who is the Head of MDRx.
Covid-19 has dramatically changed the workplace since March this year but what are the key changes the immigration group have observed since then?
What we’ve seen in the immigration group is a shift in Home Office procedure and the Home Office’s reliance on in-person appointments and the sight of original documentation. During the first lockdown we saw a significant slow down or even a halt in some areas in the Home Office processing. As with every other office-based business the Home Office had to adapt quickly to remote working and this included finding ways for caseworkers to access secure Home Office systems remotely from home and also to implement flexible new processes and policies for visa submissions and the good news is that many of these processes look as though they could be here to stay. While the Home Office have for some time been working towards a more agile, more digital system in this way, the process was set to take years to implement across the globe. However, as with many other organisations Covid-19 has forced the Home Office to accelerate the implementation of digital technologies which were already in the pipeline and also to create new policies to fit the sudden restrictions in movement and in-person human interaction.
We’ve also seen the Home Office offer more flexibility in terms of the country of submission of an application. So, previously it was not always possible for applicants to switch from one visa category to another in the UK but during the Covid-19 pandemic the Home Office adopted a flexible policy in relation to this and this allowed people to submit in the UK where ordinarily they wouldn’t be able to and this saves unnecessary and time-consuming international travel. Some of these flexibilities are now permanent, we’re really happy to say and they’ve been written into law in the new immigration laws which are going to be in place from the 1 December 2020. With the end of free movement from the EU, there’s likely to be an increased number of visa applications from the 1 January 2021 as EU nationals who wish to come to live and work in the UK will need a visa to do so. So, in a very strange way, Covid-19 has helped us shape the immigration environment to cope with the increased number of visa applications which are forecasted due to Brexit.
Neil, a question for you. It appears the Home Office in some circumstances recognise the growing change of agile and flexible working. Do you think that might extend to employees wanting to work even more remotely and possibly overseas?
From an immigration control perspective, I think the Home Office would argue that where somebody can effectively work from home 100% of the time, on what basis do they require a visa and moreover would it be just more pragmatic that they actually say stay in their home country and just work remotely from overseas? Whilst the UK is clearly sort of dealing with that as a concept, there are other countries that are a little bit ahead of the curve here and so looking at a global position there are some countries, taking some Caribbean countries for example, they are actively looking to attract workers to move to their countries to remote work from there. And they have introduced visa categories to facilitate this. So, I think for some countries they’ve already identified this trend as an economic opportunity, a potential boon for them and perhaps unsurprisingly they’ve reacted to that and they’ve introduced these categories, as I said, designed specifically to promote agile working practices and remote working practices.
Charlie, if I can pass over to you on the tax side. Obviously, tax is a huge part of this possible future of more flexible and remote working and while it’s possible and I wonder what, what impact it’s had – remote working – on individuals you’ve been working with since March.
We’ve seen a lot of issues since March and the beginning of the tax year in April where individuals have been stuck in a country where they normally wouldn’t be based and they’re working and they are panicking about what their tax might be because they’re now working somewhere they wouldn’t normally be, their normal plans have gone out the window and they’re a bit worried about that. And the other side of it is individuals who have just completely embraced it and taken advantage of the flexible working.
What we’ve seen a lot on our side is individuals that would normally be very carefully counting their days in the UK to avoid becoming UK tax resident and they know that we have a statutory residence test that they need to tick the right boxes and a lot of our clients will be very carefully managing their day count in the UK to avoid triggering a tax resident status here. And what we’ve found with them is a lot of them are spending a lot more time here because their flights got cancelled, they were told to quarantine here and the borders were shut. And the situation for those individuals are that basically our statutory test allows for an individual in each year to discount up to 60 days that they spend in the UK for exceptional reasons and the Government and HMRC gave specific guidance in relation to Covid and how it would relate for these 60 exceptional days and effectively, if you are someone that’s found yourself stuck here and you couldn’t get out again because you were told to quarantine, the Government guidance was not to travel, the international borders were closed, or you were asked by your employer to come back here on a temporary basis because of the virus. Now when we’ve been working with clients they fall into various categories. We will have some clients that yes, they normally would have become tax resident but they fall squarely within the exceptional days because of the flights being cancelled, their home border closed and them not being able to leave. And we have clients who have gone way over the 60 exceptional days and as a result are definitely going to be caught and you know everyone likes to play the game as much as they can and we’ve got clients who are saying, “Oh there was no commercial flights. I couldn’t go home.” I’m like, “Yeah but you’ve never taken a commercial flight in your life. You’ve only flown a private jet. Who are you kidding?” HMRC are going to be looking at people carefully where they think they are taking advantage of these exceptional rules. If you were let’s say normally paid by a UK employer and you’ve gone and based yourself abroad and they’ve continued to pay you but your spending as little as 90 days somewhere, then I would hope that the double tax treaty would basically say, “Well, you would just be taxed in the UK.” You wouldn’t have a local exposure in France or wherever you’ve gone to. But that is something you should certainly be looking into just to double check there’s not a problem.
That’s really helpful, thank you very much. And I think that segues quite nicely to Dom in employment.
Before the Covid crisis there was a trend towards home working anyway and I just think that we’ve jumped forward 10 or 15, 20 years in one go and it was likely faster than both employers and employees were ready for. And I think there has been some flexibility both sides. I think employees have been okay paying for their own internet to be using for sort of company purposes because they’re saving on their commutes. And I think employers are okay showing a little bit more flexibility about how employees spend their time in, in return for the extra sacrifices employees are making. On the health and safety side, an employer is responsible for an employee’s welfare, health and safety, so far as is reasonably practicable. So, you should really as an employer be conducting a risk assessment. And I know at Mishcon when I joined I had the pleasure of a form and I think maybe even an inspection from someone checking my monitor height and my sort of arm rest on my chair but that’s obviously much harder to do if you’ve got a workforce at home, particularly in the current circumstances. We now have a situation where if you’re working from home you have access to your, your employer’s software, its confidential information and up to a point, potentially some of its intellectual property. It used to be the case that on termination of employment, if you left work you would be allowed to go to your desk, fill up a sort of cardboard box of belongings and sort of walk out of the door. Whereas now you’re in a situation where you could fill in that cardboard box but you’d still be at home and so there’s almost a slight reverse situation and from an employer perspective you want to make sure that you have as much control as possible over that information and over those systems. It is possible to check what your employees are doing on a day-to-day basis and that they’re using systems appropriately but despite, I find the sort of, there’s a misconception that an employer can spy. That is not the case. It’s always best I find as an employer to be open and transparent about your activities and if you are going to be monitoring or looking at things and conducting an appropriate assessment but also making sure that employees are aware of what’s going on.
Lots of employees have demonstrated that they can work from home. How do employers really think about starting with the return to the office when the time comes?
There are some employers who are particularly focused on getting employees back into the workplace as soon as possible. And they were doing so just prior to the sort of current lockdown. And I think an obstacle is going to be flexible working requests from members of the workforce seeking to maintain the status quo. It used to be the case that you could tell employees that their jobs could not be done from home and now there is a large portion of the workforce that is able to demonstrate that they in fact can work from home. And my advice to an employer in that situation is to genuinely consider flexible working requests on an open basis, trying not to pre-judge. But also, try and make any application made on a formal basis. There is a statutory process for making a flexible working request. And the advantage of that is you have a formal system which you can then point to if you ever needed to justify an approach and also a flexible working request in that format can only be made once a year.
The pandemic has seen us all move a lot more online. What has this meant from a technology perspective?
What we have seen in the last, what is it now, 10 months in the pandemic, enormous strain on legacy systems I think is the big thing to mention. I think the unsung heroes in this pandemic have probably been the IT guys and girls and they’ve been working extremely hard over the last 10 months just to keep us afloat and keep us swimming against unprecedented demand. I know we use the word ‘unprecedented’ a lot at the moment but it really, really has been. We’ve actually seen for a very brief period at the start of the pandemic, the cost of compute i.e. computing power, the amount of computing power available per dollar go down for the first time in well, ever. To give it some context, computing power available per dollar has probably increased by a factor of about 10 every four years for the last 25 years. At one point at the start of the pandemic, that flatlined. That’s never happened. That wasn’t because nobody was inventing new technology it’s just that the demand went through the roof. So yeah I think the IT heroes are, are you know, they’re well due a mention and a thanks for keeping us online. When we hired our data science team five years ago, it was because we were quirky and when someone asked us why we had them a year ago it was because we were cool. Now it’s just because actually any business worth its salt runs itself on a data-driven manner moving forwards and I know and can state definitively that we in Mishcon as a business will be more and more data-driven as we lawyer and hire professional services moving forward. And I think organisations everywhere, public sector, private sector, are really seeing the benefit of data-driven decision making in everything that they do and that’s gonna be a future… The shift to digital and actually we’re doing meetings by Teams and Zoom or whatever platform we’re using, that’s been quite a stark transition. I think I certainly expect that to remain the case post-Covid, whatever post-Covid might be and whenever that might be. I certainly hope it will be especially as we start to have a bit more of a discerning look at our carbon footprint and things like that. That’s a change that’s here to stay.
Thanks to everyone for joining us today. That brings our session to a close. And we hope to see as many of you as possible at our future events or digital sessions. If you’ve got any follow-up questions please drop any of us a call or an email or whatever’s best for you and we’ll get back to you. So, thank you all for your time.
The Mishcon Academy Digital Sessions. To access advice for businesses that is regularly updated, please visit Mishcon.com.