EIM11825 - PAYE: special type of payer or payee: non-resident employee

Section 690 ITEPA 2003

Where an employee who is either

· not resident for a tax year or,

· resident but meets the requirement of s26A ITEPA 2003 for the tax year,

works or will work in the UK in that tax year and also works or is likely to work outside the UK, the employee may be taxable on only part of their employment income. In these circumstances some of their income may not be PAYE income.

As set out at PAYE81545, an application may be made under s690 for a direction to operate PAYE only on the income which is taxable in the UK. If no direction has been made, s690 provides that all of the payments made in the tax year are treated as payments of PAYE income.

Section 690 also applies in relation to an employee in a tax year if the tax year is likely to be a split year for that employee and they work or will work in the UK in that tax year and also work or are likely to work outside the UK.