PT 56 - OVERSEAS ASPECTS – PAYE, SHARE OPTIONS AND TRAVEL EXPENSES Flashcards
PAYE should be applied to an employee’s earnings if the employer…
has a ‘tax presence’ in the UK. A ‘tax presence’ means a UK place of business such as a UK office.
If an employer does not have a tax presence in the UK…..
earnings can be paid gross. The employee should then apply to implement a ‘direct payment’ scheme and deduct tax
themselves.
There is no requirement to withhold PAYE from earnings paid to…..
non-resident employees working overseas.
If a UK resident employee is working overseas…..
PAYE must normally be applied unless tax is withheld at source in the overseas country
Where a share option gain has been made by an ‘internationally mobile employee’ ……
the gain will be apportioned based on UK and non-UK workdays. As with salaries and bonuses etc, some part of this gain will either:
1. escape UK tax; or
2. be taxed in the UK on the remittance basis (where the employee is non-UK domiciled and is a remittance basis user).
For National Insurance purposes, any employment-related securities income which is…..
attributable to days when the individual was not within the UK National Insurance system will not subject to UK NICs.
Relief is available for travel to take up an overseas posting and for the return journey where….
the duties of the employment are performed wholly outside the UK.
In these cases, no benefit arises where accommodation and subsistence is paid for by the
employer.
Relief is available for all journeys to and from the UK where duties…
are performed partly overseas and interim visits back to the UK where duties are performed wholly outside the
UK, provided the travel costs are borne by the employer.
What if you are working overseas and your spouse / children come to visit you?
Relief is also available for two return journeys for the spouse/civil partner and each child, provided the costs are borne by the employer.
Where a non-domiciled individual comes to the UK to perform employment duties….
relief is available for the travelling expenses if borne by the employer and the same rules apply for family visits too, but relief is only available for the first five years and provided the
employee was non-resident for two years prior to arrival.
If an individual receives a termination payment in a non-resident tax year…..
foreign service relief (FSR) is available. FSR exempts all or part of the payment depending on the proportion of foreign service to total service.
