Expert Irish tech firm warns business travel can be taxing
With business travel, your main concerns as an employee or company revolve around getting there, staying there and getting around. But failing to understand local red tape could land you as an individual with a barring order from a country or your company with a hefty tax bill.
Keeping you in the good books of your destination country is a growing area for new travel businesses, among them Irish tech startup Relodata founded by Liam Brennan.
Donald Trump and Brexit have implications for businesses working abroad, said Brennan, a veteran of the travel technology sector, who set up Relodata two years ago, and is now looking to expand his company, which focuses primarily on the massive business travel markets - for short-stint workers and those on long-term assignments - in the US and UK.
His software, GT Global Tracker, specialises in duty of care, and he foresaw a gap in the market for it, due to countries "taxing corporates where they create the value". And it's not just an issue for global multinationals, he told the Sunday Independent from California, with corporate travellers often unaware that they can be liable for tax abroad if away for sustained periods.
"The software tracks the number of days a worker is spending in each location. When they hit a certain threshold for tax we send an alert to the traveller and the employer," said Brennan.
Brexit will be a huge factor, one that hasn't been widely publicised, he said. "From an Irish company point of view the biggest impact is the Monday to Thursday commuters. There's been very much a blind eye thrown to that over the past 20 or 30 years. In the new Brexit environment Ireland will likely still have to hit the HMRC (UK taxman) rules for days spent in the country for double taxation agreements," he warned. "In the past if you're working for, say, a food company and your patch was the UK no one really worried about how many days you spent in the UK."
Now the software highlights when a worker is about to hit a tax threshold - and the employer will then either "file the right forms" or send over a different employee. The US can pose problems too, he revealed, with firms looking at federal taxes only, and "a lot of Irish companies getting caught with state tax bills in the likes of New York, Connecticut and California".
The software is used by the likes of accounting group BDO in its offering as well as by workforce mobility giants Weichert, Altair and Santa Fe when deploying clients' staff around the globe.
Moving around isn't as easy as it was, in an era of tightening borders and heightened security under a new Washington administration. Brennan believes the old mindset was to send an employee away on a US tourist visa, even for a work trip.
"In the past you abused the Esta programme - you can't do that any more," he insisted. "Now it's a H1b or a B1 visa and we help companies to understand when people push the limits of that visa. If a trip overruns, alerts will be issued when necessary."
Brennan said President Trump's 'hire American, buy American' executive order didn't apply necessarily to immigration, but "gave a new impetus to border guards to go beyond page two of the rule book that they only ever got to - now it's pages 10, 12, 13. They're asking far more questions."
He said this is critical for frequent travellers at immigration points: "They're looking back, saying 'you've spent 30 of the last 60 days in the United States - we don't think you're a business traveller, we thing you're working here."
The individual worker should be aware of the huge cost of being caught travelling under the wrong visa. "What people don't realise is every passport is personal. Canada is a good example; fall foul of the rules and they will exclude you from that country for a period of time."
Given his involvement with UK companies in the relocation and travel space, he said talk of a massive Brexodus to Ireland "is an absolute myth in our experience", but there are upsides. "We've seen a marked increase in business travel where companies are saying to executives, 'We're considering Frankfurt, Luxembourg, Dublin: would you be prepared to commute for three months, six months, nine months until it [Brexit] stabilises'. So we've seen that increase... but no one is going to shell out for a 10,000-person building until they really know the impact of Brexit."
A keen observer in the market, he believes Ireland is missing a trick. "The interim impact is an increase in business travel rather than wholesale relocation, so if Dublin were to market themselves properly they'd market themselves as a business travel hub rather than a relocation hub as we're pretty much two hours from anywhere in Europe," he added.
Business has taken off for the GT Global Tracker. Brennan said it recently closed a funding round for €1.4m and expects to create 10 new jobs in Dublin this year. Backed by Fingal LEO, the company is due to move to the Enterprise Ireland HPSU.
Sunday Indo Business