Inbound employees ― payroll issues

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Employment Tax

Guidance

STOP PRESS: The remittance basis is abolished from 6 April 2025, although this only applies to foreign income and gains arising on or after that date. The remittance basis rules still apply to unremitted income and gains arising before that date but remitted later. The legislation is included in FA 2025. For more details, see the Abolition of the remittance basis from 2025/26 guidance note.

Eligible for work?

The employer must ensure that an employee coming from overseas is eligible to work in the UK. Failure to complete the right checks can trigger a civil penalty (fine) of up to £20,000 for each illegal worker. There is an online tool on GOV.UK for these checks. See the Checking the employee’s right to work guidance note.

During these checks, the employer should review the employee’s passport and the passport number should be included in the first Full Payment Submission (FPS) that the employer makes, where this is known. This should be sent once to HMRC, if held.

General principles

The general rule is that PAYE

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Paul Tew

Writer and advisor at Paywatch

Paul Tew is a freelance adviser, primarily in the areas of pay, personal taxation and remuneration planning. A frequent contributor to technical journals on pay and benefits issues, having written for the "In Business" section of the Times. Paul continues to supply articles for various recognised professional publications including Pay and Benefits magazine, Taxation magazine and Company's Secretary's Review. Paul also has had several loose leaf and bound books published on a variety of subject matter including PAYE, NIC, Sickness and Maternity Pay.Paul has written and presented training courses as well as headed up payroll and employment help desks and acted as an assessor for recognised Payroll/HR qualifications. Paul previously worked in the healthcare and oil sectors managing Pay and benefit services, so has many years of experience in dealing with PAYE and employment compliance issues across a broad range of industries and organisations.

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