When a UK-based employee is sent to work outside the UK, the employer's obligation to operate PAYE normally continues. Similarly, in the case of a foreign employee working in the UK, a UK business may be required to operate PAYE on all of that individual's earnings.
Reduced PAYE withholding for expatriate employees
The withholding of tax under PAYE can cease or be reduced in the following circumstances:
- Ìý
(a)ÌýÌýÌýÌý a UK employee working full-time abroad becomes not resident in the UK and has no earnings for UK duties (so there are no UK-taxable earnings)1
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(b)ÌýÌýÌýÌý the earnings qualify for the seafarers' 100% foreign earnings deduction in ITEPA 2003, s 378 (see E4.753)
- Ìý
(c)ÌýÌýÌýÌý the earnings are exempt from UK income tax under a double tax agreement (see E4.1329)
- Ìý
(d)ÌýÌýÌýÌý a resident (but not ordinarily resident up to 5 April 2013) individual has taxable earnings within ITEPA 2003, s 15 for UK duties and remittance basis earnings within ITEPA 2003, s 26 for non-UK duties (see ITEPA 2003,
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