PAYE Manual

PAYE81522 - PAYE operation: international employments: Effect of a globally mobile employee PAYE notification

Where an employer has made a valid globally mobile employee (‘GME’) PAYE notification for a tax year, it has effect for any relevant payments made after HMRC has acknowledged receipt. For this purpose ‘relevant payments’ means uncertain payments (see PAYE81513) where the notification was made under section 690A ITEPA 2003 and qualifying payments (see PAYE81517) where the notification was made under section 690D ITEPA 2003.

Which provision a notification is made under depends on the employee’s residence position in the tax year. As such, if the employee’s residence position changes, or is likely to have changed, after the notification is made, this can affect the continuing application of that notification.

So, if a notification was made under section 690A on the basis that an employee was likely to be non-resident in the UK in that tax year, but subsequently it became apparent that the employee would likely be UK resident in that tax year, this would affect how the notification operates. The notification only affects uncertain payments and if the employee is likely to be UK resident for a tax year, then any payments would not be uncertain, unless the employee is eligible for split year treatment for that tax year, and only if they relate to the overseas part of the tax year.

This means that any payments which relate to a tax year in which an employee is, or is likely to be UK resident, and which don’t relate to the overseas part of a split year would be wholly PAYE income within section 683 ITEPA 2003 and so cannot be uncertain payments. So, any notification made under section 690A could not treat part of those payments as being not PAYE income.

If the employee is, or is likely to be, a qualifying new resident for that tax year then the employer can make a new notification under section 690D, which would then apply to any qualifying payments made after HMRC has acknowledged receipt of the new notification.

Where an employer makes a new notification under section 690D, any notification under section 690A made on the basis that the employee is, or is likely to be, non-resident in the UK for that tax year will cease to be effective.

Where an employee is, or is likely to be UK resident for a tax year, and that year is, or is likely to be a split year in relation to that employee and the employee is, or is likely to be, a qualifying new resident in that tax year, the employer can make notifications under both section 690A and section 690D. The section 690A notification would apply to any uncertain payment which relates to the overseas part of the year, while the section 690D notification applies to any qualifying payment which relates to the overseas duties performed in the UK part of the year.

Similarly, if a notification is made under section 690D, but it becomes apparent that the employee is, or is likely to be, non-resident in the UK for that tax year, any payments made to the employee would not be qualifying payments. This means a new notification would be required under section 690A if the employer intended to continue treating the proportion of any uncertain payment which is expected to relate to overseas duties as not being PAYE income.

Trailing or deferred income

Where a payment of PAYE income is received in a later tax year to the one in which it was earned and there is a notification effective in the tax year to which it relates, there will be the following options available to the employer.

• Where a payment is made by an employer and the GME PAYE notification in place during the period in which the income was earned was under section 690A, if there is certainty as to the part of the payment that should be subject to PAYE, then an employer should apply PAYE on that amount.
• Where there remains uncertainty as to the proportion of a payment that is PAYE income, and a notification was in place in the tax year in which it was earned, then the effect of the notification can be applied to the payment.
• Where a payment is made by an employer and there was a GME PAYE notification under section 690D in place during the period in which the income was earned.  PAYE should be operated on the amount as specified in the notification that was in place.  This is because the payment of employment income would still be a qualifying payment and a notification made under section 690D has effect for any qualifying payment made by the employer in relation to the period it was earned.
• Where a payment is made by an employer in respect of an earlier year and there was no notification made for the tax year to which the earnings relate, then PAYE must be operated on the whole payment.

This means that PAYE income paid in a tax year other than the one in which the income was earned, so that the income relates to a previous tax year, must have PAYE operated on the full amount of PAYE income, unless a valid GME PAYE notification or GME PAYE direction was made for that previous year. Where such a notification or direction was made, if the payment is one to which that notification or direction applies, then it would treat part of that payment as not being PAYE income.

Even if a notification or direction was made under section 690A or section 690B respectively, if there is certainty as to the extent to which the payment made in the later year comprises PAYE income, then the payment will not be an uncertain payment and so PAYE should be operated on the PAYE income paid.

Example

Alain arrives in the UK for the first time in April 2025 on secondment from his employer in France.  His employer expects him to be a qualifying new resident and perform 75% of his duties in the UK and 25% of his duties in France in the 2025 to 2026 tax year.  His employer makes a GME PAYE notification under section 690D accordingly.  During the 2025 to 2026 tax year Alain receives his salary of £150,000.  He is also entitled to a bonus of £40,000 to be received in June 2026 in respect of the performance of his duties during the 2025 to 2026 tax year.

In the 2026 to 2027 tax year, Alain's employer believes that Alain's UK duties will increase and, as Alain remains a qualifying new resident, makes a new notification after 6 April 2026 with the UK duties accounting for 80% of his workdays with 20% performed in France to be effective for the new tax year.

When the bonus is paid to Alain in June 2026, his employer has not yet fully determined Alain's workday apportionment for the 2025 to 2026 tax year.  When making the payment the employer must operate PAYE on 75% of the amount in accordance with the notification that was in effect for the 2025 to 2026 tax year when the bonus was earned. The new notification will not have effect a payment for earlier years.  If Alain's employer had determined what the workday split was and knew the amount that was PAYE income, this would still be the case.  Alain will have to file his self assessment returns to determine the final tax position and make the necessary OWR elections and claims.