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NIT and tax treatment for non UK employees employed by UK company

We act for a UK resident company . This company took on an employee on 1 January 2007 who is NOT and WILL NOT be resident/ordinarily resident or domiciled in the UK. This employee is a FRENCH national whose place of residence and domicile is in FRANCE. NONE of his duties of employment will be performed in UK.

We have tried unsuccessfully to speak and obtain advice from :-

Employers’ helpline
End of Year Employers helpline
Call centre
By post by sending a letter with P46 form explaining the above.

In the end we have been told to contact the centre for non residents, but the number is engaged or we are told to call again. And the email address is useless

We need to know what tax code (we believe the NT code should be applied) to use and obtain confirmation that no NI contributions are payable either. This employee does not have a UK NI number, but we have obtained his French Social Security Number.

It would be helpful if there was some notes and guidance on the web-site or on employers CD rom. While this situation is unusual it is not unique and we should like someone to get back to us ASAP. How does HMRC expect taxpayers/employers to follow the rules if they are not clear or easy to find.

Just managed to get through CNR and guess what they have referred me back to the employers' section (but with new telephone number) and no one is picking up.... plus the NI section for non residents.

Why do they have to make it so complicated????

Any help from members would be greatly appreciated.

Michèle SHAPLAND

Replies

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30th Apr 2007 12:34

Who is making it complicated ?
The employee's ordinary residence, domicile, nationality and French social security number are irrelevant. Why would you think that an End of Year helpline would be able to help?

If the employee is not resident in the UK and does no work in the UK, he is not subject to UK income tax. That is the law. PAYE codes are just a means of making payments on account of UK income tax. As the employee is not subject to UK tax, use any PAYE code you like that prevents your payroll system from deducting income tax - NT will do nicely. Hopefully, you told the PAYE district on the P46 that you would be using NT, along with giving his address in France - you have fulfilled your responsibilities.

As the employee is not resident in the UK, there is simply no question of him paying UK NIC. He will have to make arrangements to pay his French social security contributions, but that is not your problem. Use NI table 'X' or whatever will prevent your payroll system from deducting ee's NIC or charging er's NIC.

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