Special modified PAYE arrangements set out in PAYE82002 can apply to tax equalised employees, to reflect the fact that the employee receives a guaranteed net income (which becomes the contractual earnings) and the employee's tax payments will be paid by the employer. Equally, any refunds of income tax on the earnings belong to the employer. Note that a special new starter checklist should be completed for all employees included in an expatriate PAYE arrangement.
Employees within modified PAYE arrangement
In order to be covered by the arrangements, the employee must be equalised on all earnings, other than payments on termination of employment and gains on share options. The arrangements can be used for any tax year for which the employee is taxable on the remittance basis, and also for any year for which they are taxed on the arising basis.
Appendix 6 arrangements in practice
The Appendix 6 arrangements (also known as PAYE82002 arrangements or modified payrolls) enable the employer to settle the total income tax
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