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Personal tax considerations for non-resident individuals working in the UK

When individuals come to the UK to work, even if on a short term basis, their earnings will be subject to UK Pay As You Earn (PAYE) from day 1.

This can cause issues for the individual as they may end up paying tax in the UK and in their country of residence on the same income. There are procedures in place in the UK to try to claim back the double taxation but this can be confusing and time consuming.

To try and assist with this issue for companies who regularly employ non-resident employees on a short term basis, and the individuals involved, there is a scheme that the UK Company can sign up to called EP Appendix 4. This arrangement provides that PAYE can be disregarded in certain circumstances on these individuals, who are known as short term business visitors.

The conditions for EP Appendix 4 are as follows. The individual must be:

  • Resident in a country with which the UK has a double taxation agreement under which the Dependant Personal Services/Income from employment Article (Article 15 or the equivalent) is likely to be competent.
  • Working for a UK company or a UK branch of an overseas company.
  • Be legally employed by a UK resident employer (even if economically employed by a separate non-resident entity)
  • Expected to stay in the UK for 183 days or less in a twelve month period.

When we talk about the economic employer of the individual we are referring to who ultimately bears the cost of the employee. So this comes into play when an employee enters an employment contract for a short period of time with a UK employer but this UK company then recharges the cost of the employee back to maybe a group company outside the UK. Where this contract is for 59 days or less then the PAYE does not have to be operated on this employee.

If an employer applies for an EP Appendix 4 arrangement then they must ensure they have adequate procedures in place to record accurately the days spent by the employee in the UK.

The agreement outlines the treatment for each STBV as follows:

Once a company has successfully applied for an EP Appendix 4, these short term business visitors can be paid without the deduction of PAYE. 

What we can do to help

If this is something which affects your company we can offer advice on whether your Short Term Business Visitors are eligible under this scheme and also provide assistance in making the application to HMRC.


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 Nicola Morgan-Schulz


Nicola Morgan-Schulz
Associate Director, Corporate Services | Company Formation
T: +44 (0)117 918 1241
E: Nicola_Morgan-Schulz@jordans.co.uk


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