Tax tip: Expatriate employees in the UK

Companies which send expatriate assignees to the UK should consider whether they can use an HMRC easement – known officially as an EP Appendix 6 Agreement. This easement applies where employers have tax-equalised secondees in the UK.

The agreement – which needs to be formally applied for and agreed with HMRC – allows the employer to ‘simplify’ the PAYE reporting. For example rather than having to report the actual definitive salary each month on a live real-time basis the employer – or adviser or payroll bureau – can report the expatriate’s earnings (pay and benefits) on an annualised ‘best estimate’ basis.

This ‘best estimate’ basis helps simplify the reporting obligations for UK employers with foreign assignees and can help to mitigate the risk of payroll failures which would arise if the salary information had to be reported on the same basis as with...