Employee coming to work from abroad – agreement to operate PAYE on earning for UK work – Section 690

In light of #COVID19, HMRC has updated guidance on the operation of Section 690 agreements. Information about operating PAYE on an employee’s earnings for work they do in the UK, and how to amend an agreement already in place due to coronavirus (COVID-19) added.

Agreement to operate PAYE on an employee’s earnings for UK work

There are options to apply to operate PAYE on an employee’s earnings for work they do in the UK if the employee is either:

  • not a UK resident and works both inside and outside the UK
  • resident in the UK, the remittance basis applies to them and they meet the 3 year period of non-residence

If HMRC agrees to operate PAYE in this way it will apply to all payments made to those employees, including:

  • termination payments
  • share-based remuneration

Changing an agreement due to coronavirus (COVID-19) measures

If there is already an agreement with HMRC in place, it is possible to ask to amend it if the measures that have been introduced to stop the spread of coronavirus means an employee has been unable to leave or return to the UK.

This will mean if the employee:

  • has been unable to leave the UK in the 2020 to 2021 tax year the employer can be able to operate PAYE on 100% of their earnings
  • is unable to return to the UK indefinitely UK tax could be reduced or may not be due, depending on the employee’s circumstances

To ask HMRC to amend your agreement write to:

– for expat employees

– for all other employees

Can PAYadvice help?

If you are looking for assistance with section 690 applications or other inbound or outbound ex-pat schemes we may be able to assist. We are also experienced on how to operate the calculation in payroll solutions that can handle these types of special calculations. We may be able to assist.

PAYadvice.UK 21/10/2020

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