Author:
Mary Lou Stockton – Global Tax Network
A US company sends an employee on assignment to the UK. The company informs the employee that they will pay X amount for his UK housing. The employee wants to spend more, because he wants a larger, nicer flat. He feels the allowance is not enough for the type of flat he wants considering his family needs, including the fact that his wife wanted to live near other Americans.
The HR Director works with the business manager to determine whether the company would pay more in this case. The employee is told that he will have to reimburse the company for excess housing cost through payroll. The employee contends that he should get a tax deduction on his hypo tax for the excess housing that he funded. The issue went to the tax accountant and finally to the company VP for resolution. The VP asks why he is being asked to resolve assignment allowance issues and tells HR that they should “handle it”. The HR Director considers transferring to something less complicated, like nuclear engineering or cell biology.
It does seem expats take a disproportionate percentage of HR’s available time, and require much more administration than one would expect. The trend in HR today is towards “self-service”. Why do we need such detailed and centralized control of assignment expenses and allowances?
Why can’t I just give assignees some extra money to handle the costs of an international assignment?
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