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HMRC internal manual

PAYE Manual

PAYE operation: international employments: effect of operating code NT

Departures from the UK

The employer should operate code NT, on a non-cumulative basis, in accordance with PAYE81660 or PAYE81665 on earnings paid to the employee for work done abroad from date of departure. This means the employee will be unable to receive any tax refund until after the year end.

Alternatively, the employer may run two separate PAYE records on the payroll for the employee. This can also apply in the year the employee returns permanently to the UK. Two separate forms P14 / FPS (end of year documents) will be required.

This procedure has the following effect

  • During the rest of that tax year, the employer refunds tax deducted from pay prior to departure by virtue of the cumulative operation of PAYE.
  • Using code NT ensures that the earnings for work abroad are paid gross of tax but not of National Insurance contributions. Code NT is operated cumulatively so that it gives a refund if it is operated later than the date of departure.
  • The HMRC office cannot make any refunds in the year of deduction. You must review liability after 5 April each year and repay direct any tax deducted from pay before departure and not refunded by the employer. But this can only be done when you have enough information to confirm the provisional relief.