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HMRC internal manual

PAYE Manual

HM Revenue & Customs
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PAYE operation: international employments: employee working at UK branch or representative office of overseas employer

Arrivals in the UK

A branch or representative office of an overseas employer is not the same as an associated company. An associated company is a legal entity in its own right, which exists apart from the overseas employer, is no different to any other independent UK concern and is subject to PAYE as normal. See PAYE81620 where employees of overseas concerns work for independent UK concerns.

A branch or representative office of an overseas employer might already exist in the UK in which case the need to operate PAYE should already have been established. If however the taxpayer you are reviewing is the first or only employee of the overseas company to come to the UK you will have to establish whether or not PAYE is relevant. To do this, confirm what the duties of the taxpayer’s employment are and then follow the instructions and guidance below.

The employee or trainee is sent to an existing UK branch or representative office

The UK branch must send a form P46(Expat) or P46, or equivalent starter information to HMRC and should initially operate the emergency code. Follow PAYE81585 for those

  • Who plan to stay in the UK for less than two years


  • Whose plans are indefinite

The employee is sent to establish a UK branch or representative office

If a new arrival is the first employee, they may not realise that PAYE applies because no HMRC literature will have been issued

  • You must set up a PAYE scheme, and notify the Expatriate Team, even if it is only in respect of the one new employee who will act on behalf of the employer with regard to PAYE responsibilities

The overseas employer often assumes that SA procedures are sufficient to deal with the personal UK liability of such employees, but this is not so. A properly operated PAYE scheme also collects the employers NICs, which would not be collected by the SA procedure.

If initial approaches are made about issuing SA returns

  • Refer the employee or trainee to the Expatriate Team and then follow the guidance in the previous section above

PAYE81610 - PAYE81615 deal with employees sent to work at the UK branch or representative office of an overseas employer. The employees may be sent here for training purposes, but often they are not trainees in the ordinary sense of the term because they are fully remunerated adults, not apprentices.