Polish workers Living in the UK

Polish workers Living in the UK

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I have been asked by a company I look after the PAYE, has asked if can put all their Polish staff members who live and work in the UK, onto a BR tax code for December!

They tell me as they have family in Poland, they are required to complete tax returns there (December year end) and will be taxed additionally on their UK income. Because of the double taxation agreement, they will claim the higher tax paid in the UK against the even higher tax due in Poland.

Then they want me to give them back their tax codes in January or if I refuse, they will complete tax returns in April and reclaim the tax then.

I would be interested in what others think , would do - or even if they have come across this?

Frauke Golding

Replies (6)

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By AnonymousUser
23rd Nov 2006 08:33

I agree with...

.... the previous answers but the questioner should understand that the situation gets even more complicated if the employees are French Polish workers.

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By neileg
22nd Nov 2006 10:31

how would the HMRC know the tax code had changed?
They might not, but then a PAYE audit might turn it up.

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By AnonymousUser
22nd Nov 2006 09:53

US is also Dec year end.
They may have to file Polish tax returns, but will get a tax credit for any UK tax attributable to calendar year 2005.

The treaty is clear - they are allowed to deduct the tax they *owe* or *paid*, whichever is *less*. Thus, if they were able to somehow frontload their tax in the UK to the end of Dec, and then take zero withholding Jan - Apr, this would result in a fraudulent filing of their Polish tax returns, since in the UK the tax is owed evenly throughout the year (and thus the amount paid through Dec would be overstated).

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By User deleted
21st Nov 2006 12:08

You can't change the tax code
As a former tax inspector I have news for you which may help deal with this client. You are simply not permitted to change workers' tax codes to BR, nor later to change them back again.
Once an employee starts work the code is determined by their P45 or P46. After that the code can only be changed as a result of instruction in writing from HMRC - by way of an amended tax code.
If the workers want a BR code they each need to contact the Revenue and ask for it. (This could be done by letter prepared for each one, but signed by them, or by phone). It might get the code changed by December payroll time.
The changing back from BR might be queried by the Revenue.
Hope this helps.

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By frauke
21st Nov 2006 16:57

Changing Tax codes
I do have one question - how would the HMRC know the tax code had changed? If it is the correct code on the P14 they'd have no idea what happened in early months.

I will mention that on many occassions especially over the last few years, I have change tax codes during the year because employees (normally directors that I also complete tax returns) have gone part-time and I receive agents copy of coding notices with full tax codes in respect of their new employment, but no notification for their old employments to change to BR.

Some tax offices (very few) will write asking a copy of the P45 some months later - which of course I cannot provide as the person is still employed. I write back letting them know I have already put the person on BR. To date, I have never been told I should not be doing this without being told to do so.

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By petersaxton
22nd Nov 2006 21:50

Don't play around with tax codes
Some people think up ways of making money but simply thinking of a way is not sufficient. You don't change someone's tax code because the employee asks you to. You change a tax code because HMRC asks you to or because of the P45 or P46.

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