From 6 April 2025, section 690 Income Tax (Earnings and Pensions) Act 2003 is changing and the current process of applying for an HMRC direction to operate PAYE on a reduced amount of earnings will cease.
The new process will allow employers and their agents to send HMRC a notification specifying a proportion of income paid to a globally mobile or treaty non-resident employee which will be treated as not being PAYE income. Employers and agents can notify HMRC using a new online notification form, available from 6 April, and allowing them to operate PAYE on the reduced amount of income as soon as HMRC acknowledge receipt of the notification. This should be immediate.
Any HMRC directions that were issued before 6 April 2025 will cease to have effect from that date. This means that if employers wish to operate PAYE on a reduced amount of an eligible employee’s income for the 2025 to 2026 tax year, they will need to submit a new notification.
If you have any questions, please contact our tax team.
info@farrellca.com or 028 40630876
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