PAYE and overseas employees

In the UK, there are a multitude of rules and regulations that you must be aware of when you look to employ someone from abroad.

HMRC has set out specific guidance which highlights some important issues to be aware of, including:

  • Checking an employee’s right to work in the UK
  • Modified PAYE arrangements
  • National Insurance contributions
  • Payments
  • Paying tax
  • Short term business visitors
  • Work carried out in and outside of the UK

UK employers must operate PAYE and NICs for employees from abroad regardless of whether they are working on a temporary or permanent basis. This also applies to seconded employees who are being paid by an overseas company. The UK employer is responsible for reporting earnings and PAYE deductions in the same way as for a UK employee.

New employees from abroad will not have a P45 so you will need to obtain all the pertinent information to set them up and report to HMRC on a Full Payment Submission (FPS).

This includes their full name, gender, date of birth, full address and National Insurance number (if the employee knows it). The employer will also need a completed starter declaration and should enquire if the new employee has an existing student loan.

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