»Ê¹ÚÌåÓýapp

Many foreign nationals live and work in the UK. »Ê¹ÚÌåÓýapp majority are on assignments which last between 2-5 years while others may reside here for extended periods. »Ê¹ÚÌåÓýapp combination of residence and domicile status and patterns of work both inside and outside the UK may result in only part of their earnings being liable to income tax.

Some taxpayers remain employed by off-shore employers while they perform duties for a UK company. »Ê¹ÚÌåÓýapp UK ‘employerâ€� may agree to pay a certain level of net cash earnings and benefits and in addition meet the employee’s UK income tax liability. This arrangement is known as ‘tax equalisationâ€�.

Modified PAYE and payments on account

Note: Any employee dealt with within a Modified PAYE scheme should always be dealt with by the Personal Tax International (PTI) Manchester. 

»Ê¹ÚÌåÓýapp employer of tax-equalised foreign nationals may enter into an agreement with the Inspector to use the ‘Modified PAYEâ€� scheme which is described in EP Appendix 6. HMRC has exercised powers provided by S59A(9) TMA 1970 to remove the obligation to make payments on account from all employees dealt with under a Modified PAYE scheme.

Where you identify an Appendix 6 case from the details given in ‘Any other information� (box 19 of the ‘Finishing your tax return� section, page TR6 on the return), you should

• Forward the case to the Personal Tax International (PTI) Manchester.
• Delete any part capture

If a case is not identified during capture, the same action will need to be taken if identified in normal day-to-day work or on receipt of a claim to adjust from the taxpayer or agent.

Further information on tax equalisation can be found in the current EP instructions.