A new measure is introduced that will affect employers who notify HMRC through a PAYE-notification, often referred to as a Section 690 application, that they will operate Pay As You Earn (PAYE) on a proportion of the employment income of a qualifying new resident employee that will be eligible to claim Overseas Workday Relief (OWR).
The measure will take effect from 6th April 2026.
It will also affect the qualifying new resident employee for whom an employer operates PAYE on a proportion of their income.
What is changing?
When employers submit a PAYE notification form to HMRC on behalf of a qualifying new resident, the measure will require employers to check if the proportion of income they want to exclude from PAYEexceeds 30%. If it does, it will require them to limit the in-year relief provided to no more than 30% of the employee’s income.
Section 690
The Section 690 application process was digitised, and a new PAYE notification form became available from 6th April 2025. This form can be used by employers to obtain provisional in-year relief for globally mobile employees who are non-UK resident, eligible to split year treatment, qualifying new residents eligible for OWR or treaty non-UK residents.
This measure only affects employees who are qualifying new residents eligible for OWR.
And the impact?
This impacts an estimated 800 to 1200 businesses who provide in-year relief to eligible employees. In future, they will not be able to include a proportion higher than 30% on the PAYE notification form.
That touches around 9,600 employees who are eligible to claim OWR. However, most OWR claimants do not use the Section 690 process to obtain in-year relief
Those individuals who wish to benefit from provisional in-year relief can ask their employer to submit a PAYE notification form on their behalf. Not all OWR claimants will opt to receive provisional in-year relief and of those that do, not all will use the Section 690 process to do so.
This measure ensures that those individuals who do use the Section 690 process do not receive more in-year relief than they will be able to claim at the tax year end, via Self Assessment.
it is estimated that males (70%), and people aged 35 to 54 (55%) are overrepresented in the population using OWR compared to the UK population where 49% are male and 25% are aged 35 to 54.
PAYadvice.UK 29/11/2025