PAYE82008 - PAYE operation: international employments: EP Appendix 8 - PAYE special arrangement for short term business visitors (STBV)

Arrangement made, under regulation 141 of the Income Tax (Pay As You Earn) Regulations 2003, in respect of STBV Appendix 8: Short Term Business Visitors

Employer name: ……………………………………………………………….

Tax Year: .……………………………………………………………………….

This Arrangement is made under regulation 141 of the Income Tax (Pay As You Earn) Regulations 2003 [and sections 5 and 9 of the Commissioners for Revenue and Customs Act 2005] between the Commissioners for Her Majesty’s Revenue and Customs and the employer for the tax year identified above and subsequent tax years in respect of Payments made for, and Benefits in Kind provided for, duties performed in the UK by individuals who are Short Term Business Visitors.

Interpretation

In this Arrangement:

“Annual PAYE Scheme” means a PAYE scheme under which an employer is only required to report to HMRC once a year.

“STBV Appendix 8” means a PAYE special arrangement for which an Employer reports annually and pays over to HMRC the tax deducted in respect of Short Term Business Visitors including those from an overseas branch or territory with which the UK does not have a Double Taxation Agreement and who work in the UK for a period of no more than 60 workdays in any given tax year.

 “Approved method of electronic communications” has the same meaning as in the PAYE Regulations.

“Benefits in Kind” means the benefits chargeable under the Benefits Code as defined in section 63 of the Income Tax (Earnings and Pensions) Act 2003 as amended.

“Employer” means the entity identified below which is an employer, or is treated as an employer, for the purposes of the deduction of income tax by virtue of section 4 or 5 of Income Tax (Earnings and Pensions) Act 2003 or by virtue of section 687 or 689 of that Act.

Employer name: …………………………………………………………………………………..

CRN (or LLP registration number) if you have one: …………………………………………

“HMRC” means the Commissioners for Her Majesty’s Revenue and Customs.

“PAYE Regulations” means the Income Tax (Pay As You Earn) Regulations 2003 (S.I. 2003/2682) as amended or any subsequent Regulations made by HMRC under section 684 of the Income Tax (Earnings and Pensions) Act 2003 which are in substance identical to the PAYE Regulations.

“Payment” means an amount paid to an individual who is a Short Term Business Visitor for duties performed in the UK and includes notional payments as defined in Section 710 of the Income Tax (Earnings and Pensions) Act 2003.

For the purposes of this Arrangement, “Short Term Business Visitor” means an individual who is not resident in the United Kingdom for tax purposes but who undertakes international business trips to the United Kingdom working for the Employer providing that all such trips in a tax year when taken together do not exceed 60 UK Workdays [and who does not have a Class 1 National Insurance liability for Payments or Benefits in Kind].

“Tax year” means the period from 6th April to following 5th April.

“UK Workday” means a day (or part day) where duties are carried out in the United Kingdom for the Employer, excluding any day on which the duties performed are merely incidental to the performance of duties outside the United Kingdom.

An Arrangement cannot apply where a Short Term Business Visitor has a Class 1 National Insurance liability.      

Scope

1. This Arrangement applies only in relation to Payments and/or Benefits in Kind paid through the payroll provided for duties performed in the UK by the Short Term Business Visitor for the tax year specified below and subsequent tax years until the Arrangement is either terminated or reviewed in accordance with clause 11, 12 or 15.

Tax Year: …………………………………………………………………………..

Administration

2.  HMRC will set up an Annual PAYE Scheme in respect of the Employer’s Short Term Business Visitors under which the Employer will report all Payments made in a tax year to a Short Term Business Visitor.

3. Where in a tax year a Short Term Business Visitor performs duties in the UK for the Employer, the Employer must report all Payments made, and/or Benefits in Kind provided and paid through the payroll, on a return which must be delivered to HMRC by 31st May following the end of that tax year.

4. The return is to be made using an approved method of electronic communications.

5.  For each tax year for which this Arrangement is in force, when the final Payment is made to a Short Term Business Visitor, the Employer must total all Payments made to that Short Term Business Visitor and deduct from that final Payment, the tax due on all the Payments made as if the final Payment were a payment made at month 12 of the relevant tax year.  Where the Employer is unable to deduct the full amount of the tax due from Payments actually made to the Short Term Business Visitor, the Employer must account to HMRC for the tax due on all the Payments made in that year.

6. Where the Employer provides a Benefit in Kind to a Short Term Business Visitor, the Employer:

a) is not required to prepare a Form P11D in respect of that Benefit in Kind, but

b) must include the cash equivalent of that Benefit in Kind as calculated in accordance with the provisions of the Income Tax (Earnings and Pensions) Act 2003 within the month 12 calculations as referred to in paragraph 5. 

In the event that the tax on the provision of a Benefit in Kind is borne by the Employer, the amount of the tax must also be grossed up as a benefit per EIM07700.

Payment of tax

7.  The Employer must pay over any sum due in respect of tax on the Payments made and Benefits in Kind provided to Short Term Business Visitors by:

a) 31st May following the end of the tax year in question where payment is made by an approved method of electronic communications; or

b) 28th May following the end of the tax year in question in all other cases.

Interest

8.  Interest under section 101 of the Finance Act 2009 will apply to any tax due in respect of the Payments or Benefits in Kind that is not paid by the date specified in paragraph 7(a) or (b).

Review and Termination

11.  Except where a cancellation event occurs, HMRC is entitled to terminate this Arrangement with immediate effect (for example, in the event of failure to file a return in accordance with paragraph 3 of this Arrangement), and in the event of such termination:

a) the PAYE Regulations will apply to all Payments; and

b) the Employer must prepare form P11D in respect of any reportable Benefit in Kind provided to a Short Term Business Visitor.

12.  Where a cancellation event occurs HMRC can review this Arrangement and where it considers it appropriate to do so can either:

a) cancel the Arrangement by giving notice in writing (“a cancellation notice”) in which case—

    i) the PAYE Regulations will apply to the Payments; and

    ii) a form P11D must be prepared in respect of any reportable Benefits in Kind; or 

b) in the event that HMRC considers that the deduction of income tax by reference to the PAYE Regulations remains impracticable, make a revised special arrangement under regulation 141 of the PAYE Regulations.

13.  Where following a review a cancellation notice is given, that notice will take effect from a date agreed by the parties or where the parties are unable to agree a date the earlier of:

a) the end of the period of 3 months beginning with the date on which the cancellation notice is given; or

b) 6th April following the tax year in which the cancellation notice is given. 

14.  A cancellation event is:

a)  any material amendment to any statutory provision which has a material effect on this Arrangement;

b)  any change to a material fact which was a relevant factor in HMRC’s decision to enter into this Arrangement; or

c) any operational difficulty which arises as a consequence of the operation of this Arrangement.

15.  The Employer is entitled to terminate the Arrangement by giving HMRC written notice of cancellation, such notice to take effect from a date agreed by the parties or in the event that the parties cannot reach agreement the earlier of:

a) the end of the period of 3 months beginning with the date of issue of the cancellation notice; or

b) 6th April following the tax year in which the cancellation notice is given. 

16.  In the event of such termination by the Employer:

a) the PAYE Regulations will apply to the Payments; and 

b) form P11D must be prepared in respect of reportable Benefits in Kind provided to a Short Term Business Visitor,

from the date that the cancellation notice takes effect.

Arrangement agreed by: 

Name: ……………………………………………………………………………

Capacity: ………………………………………………………………………..

Signature: ………………………………………………………………………..

On behalf of (Employer name): …………………………………………….

Employer address:

…………………………………………………………………………………

…………………………………………………………………………………

…………………………………………………………………………………

Employer PAYE reference: …………………………………………………

Date: …………………………………………….

Arrangement agreed on behalf of HM Revenue and Customs:

Name: …………………………………………….

Signature: ……………………………………….

Date: ……………………………………………..

Please send applications to use this agreement to:  

Charities Savings & International 3

HM Revenue and Customs

BX9 1AJ