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How do you account for taxpayers in Wales and Scotland in a PSA calculation?
PAYE and NICs stance for individuals domiciled outside of the UK Q: Our UK-based company is employing an individual who’s domiciled in France. The expectation is that, although based in France, they’ll commute to the UK on a weekly basis and work here for two or three days per week. We have no place of business outside of the UK and are looking for advice as we’re unsure if UK PAYE and NICs arise. A: Where an employee isn’t UK resident but performs some of their duties here, it’s advisable to complete a Section 690 direction and submit it to HMRC. This will prompt HMRC to issue an instruction, ‘Application to limit PAYE’. The employer will be told how much, as a percentage of earnings, must be taxed in the UK. The employee will need to complete tax returns in both the UK and their country of residence. Schedule 690 applications can take anything up to a year to reach agreement with HMRC. In the interim (until
the Schedule 690 is received), 100% of earnings should be taxed as UK income. For reference, see: https://ow.ly/ ZbUQ50OSyS3. Where an employee performs duties in two or more European Union countries, an employer will be required to check which state’s social security liability applies, by completing a form CA8421 and submitting this to HMRC. HMRC will then inform the employer of its decision. If liability falls within the UK, National Insurance will become due on the employee earnings processed via the UK payroll. NIC liability may continue for up to two years following the start of the employment or assignment, at which time, employers should review the employee’s position regarding the number of working days spent in the UK. A further determination may then be required and HMRC may approve an extension, or issue a revised instruction regarding the employee’s NIC liability. For reference, see: https://ow.ly/ LiRo50OSyUR. n
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| Professional in Payroll, Pensions and Reward |
Issue 92 | July - August 2023
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