London Banks Ask Staff to Return From Abroad or Face Tax Consequences 

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21 October 2020 | Updated 12 November 2020

It is rumoured that several large banks, including Citigroup and Credit Suisse, are asking employees who’ve been working remotely from their overseas holiday homes, to come back to the UK.

According to a report in the Financial Times, many senior members of staff at the City of London’s top banks have been working from holiday homes outside of the UK since the COVID-19 outbreak began and remote working became the norm.

Owing to the tax consequences of having part of their workforce abroad for an extended period of time, firms are allegedly requesting that staff return to the UK.

A source from Citigroup told the Financial Times that staff who were not in the office expected to be in the country unless there were exceptional circumstances. Additionally, Deutsche Bank told the newspaper that employees who choose to work abroad will “have to cover any additional employment tax and deal with any issues themselves if borders close again.”

 

 

Back to the UK, But not Back to the office

 

Returning staff may not be heading back to their old offices, however, as research shows that 74 per cent of companies, particularly banks and insurance firms are reviewing how much physical office space they actually need.

The survey, conducted by CBI/PwC, polled 133 financial services firms and found that investment in IT systems trumped bricks and mortar office space in terms of priorities. 71 per cent of firms said they are investing in technology to support working from home.

88 per cent said the pandemic had resulted in a greater shift towards remote working, and the majority admitted that more than 90 per cent of their workforce didn’t need to be in the office to do their jobs. 

 

Remote Working Conduct Rules Still Apply for Finance Workers

 

“We expect firms to have updated their policies, refreshed their training and put in place rigorous oversight reflecting the new environment – particularly regarding the risk of use of privately owned devices.”

–Julia Hoggett

Director for Market Oversight, FCA

 

No matter where people are working, strict industry compliance applies to the finance industry, and the Financial Conduct Authority (FCA) has made their position clear when it comes to regulations.

Julia Hoggett, the FCA’s Director for Market Oversight, speaking at The City Financial Global Event on 12 October 2020, emphasised that the same standards of surveillance still apply to home workers.

In a speech titled, “Market Abuse In A Time Of Coronavirus”, she said:

“While scenarios emerged early in the pandemic where the usual levels of recording and surveillance were not possible, our experience suggests firms have now overcome these challenges. Our expectation is that going forward, office and working from home arrangements should be equivalent – this is not a market for information that we wish to see be arbitraged.”

“We expect firms to have updated their policies, refreshed their training and put in place rigorous oversight reflecting the new environment – particularly regarding the risk of use of privately owned devices.”

 

Picture: a photograph of a board that you would commonly see on a trading floor showing stock information

 

Such monitoring is commonplace on finance trading floors, but with working from home set to be the norm for the foreseeable future, the FCA seems keen to emphasise that the same rules apply at home.

Hoggett also addressed the issue of “less self-policing amongst front office staff” because teams are split:

“As an example, consider a pre-crisis situation where a front office employee observes, or overhears, something questionable involving a colleague nearby. In normal – pre-crisis – circumstances, we would hope, and expect, that the activity would be questioned, or reported to Compliance. With people working remotely, especially when staff are working from home, that type of first-line control may be diminished, or absent.”

“Staff should be in no doubt about the standards expected of them. And they should be in no doubt that these standards apply whether they are in the regular office, a disaster recovery site or at a makeshift workstation at home. Culture matters, and it matters most when the risks are highest.”

 

Finance Business Function did not Decrease During Lockdown

 

Picture: a photograph of Emma Swinnerton

 

Emma Swinnerton, EMEA Head of Flexible Leasing Solutions at Cushman & Wakefield told us that, according to their Future of Workplace Survey 2020, finance was one sector/department where the average business function experience did not decrease significantly during lockdown: 

“The finance sector, like many others, is facing an unprecedented period of uncertainty in the short term as a result of COVID-19. The pandemic has forced the biggest remote-home working experiment ever, and arguably for many in finance, the sentiment is that the workforce could stay working remotely for the foreseeable future.” 

“However, rather than make a knee jerk reaction based on the current disruption, government guidelines and short term novelty of working from home, it is crucial for companies across all sectors to consider the long term horizon for their business and how they wish to work in the future.”

“Some of the drivers to return to the office that have already been identified in the short term (the loss of learning opportunities, connection to colleagues and company culture, general well-being) will only become more exaggerated in the medium to long term.”

Picture: a photograph of a person reading the business section of a newspaper

Article written by Ella Tansley | Published 21 October 2020

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