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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
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PAYE operation: international employments: issuing code NT to employee

Departures from the UK

When an employee qualifies for an NT code in accordance with PAYE81660, write to the employee explaining that

  • The coding is provisional and will be withdrawn if the employee is ultimately not entitled to Seafarers’ Earnings Deduction (SED)
  • Records must be kept of dates of arrival in and departure from the UK
  • Provisional relief for SED must be substantiated by providing the information required each year
  • Steps will be taken to recover any tax under-deducted because provisional relief for SED later proves not to be allowable
  • You must be told immediately when the overseas contract ends

When an employee qualifies for an NT code in accordance with PAYE81665, write to the employee explaining that you must be told immediately when the overseas contract ends and the employee returns to the UK.

Action to take on the employee’s record

  • Enter a note in Contact History

    • The date you issued code NT
    • The date from which retrospective operation of code NT is authorised
  • In the coding function, enter code NT for the year after the year of departure. You can use code NT for any later years until the year in which the employee expects to return to the UK
  • Enter the overseas address on the record, see PAYE103025
  • Enter start date of NT period on the record, see PAYE64040
  • If the employee has income that is taxable in the UK at the same time as they have code NT set against their foreign income you need to set the Inhibit Automatic Reconciliation indicator

The employee is still entitled to their personal allowances against any remaining income taxable in the UK.

A work item will be generated at Annual Coding to ensure the carry forward of code NT is reviewed, for more information see Actio guide tax40199 WMI182.