From April 2016 there is a special PAYE arrangement which relates specifically to individuals unable to meet the conditions of the Short Term Business Visitor (STBV) scheme.
In the past, if an overseas employee has workdays in the UK and are not covered by a STBV agreement then they should be included within the company payroll. Furthermore, if inaccurate or late PAYE reports are provided they would be subject to penalties.
What are the benefits?
- Annual return and payment – only one annual PAYE return is due by 19 April following the end of the tax year, alternatively it can also be made annually, by 22 April following the end of the tax year.
- No P11D requirement – where the employees are provided with benefits in the UK, these will be reported on the annual return.
- Relaxation of requirement for individuals to file a UK tax return – tax return filings will not typically be required for these business visitors provided the amounts processed via UK payroll are accurate and such visitors do not have any other UK taxable income.
What does this PAYE relaxation mean?
In general, the new scheme relieves the administrative burden and allows more time for employers to calculate the final tax liability and prepare payroll. This also reduces the risk of late filling and payment penalties.
It should be noted that the new arrangements cover PAYE only and there will often be no NIC liability under the first 52 weeks rule. However, if there is a liability to NIC, it must be reported under RTI and paid to HMRC following the month the earning arose.