PAYE81514 - PAYE operation: international employments: Internationally mobile employees - PAYE notification

Section 690A ITEPA 2003

From 6 April 2025, where an employee is internationally mobile for a tax year (see PAYE81513), section 690A allows the employer, or an appropriate person designated by their employer, to notify HMRC that they propose to treat the non-PAYE proportion of any mobile payment as not being PAYE income.  This means that once HMRC has acknowledged receipt of a valid notification the employer will only be required to operate PAYE on part of the income paid to that employee.

A 'mobile payment' is a payment of, or on account of, an amount of employment income where;

  • the extent of income that is PAYE income depends on the extent to which the employee's duties are performed in the UK, and
  • the dependency exists is because the employee is, or was, internationally mobile during that tax year.

Making a notification

More information about an appropriate person and making a notification can be found at PAYE81519.

Where a valid notification is made, it has effect from the date that HMRC acknowledge receipt of the notification and allows the employer to only operate PAYE on the proportion of any mobile payment which is expected to relate to UK duties.

The 'non-PAYE proportion' specified in the notification should be the best estimate that the employer can reasonably make of the overall proportion of the employee’s income which would not be PAYE income.  This applies where the employee is non-resident in the mobile tax year, or the mobile tax year were a split year.

The GME PAYE notification process can be used to assist employers in paying the most accurate amount of PAYE possible for their employee.  The employer is expected to look at the year as a whole to determine the best estimate of the non-PAYE proportion of the mobile payments.  This means that whenever a mobile payment is made during the year, the percentage specified can be applied to that payment.

If during the course of the year, the employer realises that the employee's circumstances have changed, then they should submit an updated notification to more accurately reflect the circumstances of the employee.

Where a notification is made under section 690A for a tax year, the employee will need to file a Self Assessment tax return for that tax year. 

Example - part 1

Karl arrives in the UK for the first time on 6 April 2026 on a secondment from his employment in Germany to help start a project in the UK.  His employer expects him to work 50% of this time in the UK for the first six months of the year before reducing his time on the project and spending more time in Germany.  The employer expects Karl to spend just 20% of his time in the UK during the latter months of the tax year.

Karl expects to remain non-resident during the tax year.  Therefore, when his employer is considering his circumstances, they calculate that over the course of the tax year, it would be reasonable to estimate that 35% of the duties will be performed in the UK.  They therefore make a PAYE notification specifying that 65% is the non-PAYE proportion.

Example - part 2

Six months after Karl arrives in the UK, the project falls behind schedule and his employer asks him to continue working 50% of his time in the UK for the remainder of the tax year.  Karl has reviewed his likely residence position and he still expects to remain non-resident for the tax year.

Because of this change, the non-PAYE proportion previously provided in the employer's notification is no longer a reasonable estimate of the overall proportion of Karl's non-UK duties for the tax year.  Karl will now spend the full year performing 50% of his duties in the UK.

During the first six months, Karl spent 50% of his time working in the UK, but the employer had been operating PAYE on only 35% of his earnings.  With the revised working pattern, and to ensure the correct amount of tax is collected by year end, the employer must submit a new notification to HMRC.

The updated notification specifies a non-UK proportion of 35%, meaning PAYE must now be operated on 65% of Karl's employment income.  This adjustment ensures that, over the full tax year, PAYE will have been operated on 50% of Karl's total earnings.

Example - part 3

Conversely, six months after Karl arrives in the UK, rather than the project being behind schedule, it is ahead of schedule and Karl's employers want him to return to Germany to focus on other projects.  Karl will still be required to occasionally visit the UK to check on the project, but it will be on an ad hoc basis and the employer does not think it will be a significant amount of time.

The non-PAYE proportion specified in the notification now ceases to be a reasonable estimate of the overall proportion of PAYE income of all mobile payments made in the tax year.  Karl will now expect to spend the remaining 6 months of the tax year performing few UK duties.  The employer submits a new notification to HMRC specifying the non-UK proportion as 85% and therefore operating PAYE on 15% on payments of employment income to Karl.

If Karl had stopped all his UK duties entirely there would be no ongoing UK obligation and the notification would cease to have effect.  Karl will file a Self Assessment return at the end of the tax year, and a final tax liability will be calculated.

Where a notification has been made under section 690A, HMRC can issue a direction under section 690B specifying a different proportion to that included in any notification made by the employer, which will then have effect in relation to any subsequent uncertain payment made during the tax year (see PAYE81520).