PAYE obligations

By Tolley in association with Paul Tew
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The following Employment Tax guidance note by Tolley in association with Paul Tew provides comprehensive and up to date tax information covering:

  • PAYE obligations
  • Coming to work in the UK
  • Leaving the UK to work overseas
  • Overseas employee leaving the UK
  • Employee returning from overseas assignment

Coming to work in the UK An employee is subject to income tax if he is resident or carrying out employment duties in the UK Just one day of work in the UK can result in a UK tax liability for the individual It can also result in pay as you earn PAYE obligations for the employer See the Setting up a payroll and Employees starting and leaving guidance notes PAYE obligations Under normal procedures an employer is required to consider the status of any individual performing work on their behalf See the Employment status why it matters guidance note Payments to employees are required to be made under the PAYE regulations However registration is not required for an employer PAYE scheme if all employees are paid below the national insurance threshold lower earnings limit and do not have another job Under real time information RTI reporting an employer is required to operate PAYE where at least one employee is earning at least the lower earnings limit in which case all payments of earnings to all employees must be reported to HMRC including those employees earning less than the lower earnings limit If an individual has a contract with an overseas employer it may not be possible for HMRC to enforce the operation of UK PAYE regulations In order to be liable to operate a PAYE scheme an overseas employer must have a presence in the UK see the Non resident employers and liability to PAYE in the UK guidance note If the overseas employer does not have a tax presence in the UK the PAYE obligation may fall on a UK business ITEPA 2003 s 689 can impose the PAYE obligation on any UK agency where a worker is employed by or engaged via a non UK company and works for a UK company any UK business for which an overseas employee works From 6 April 2014 a UK intermediary who has made an

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