Income and Corporation Taxes Act 1988

[F1 203C PAYE: employee of non-UK employer. U.K.

(1) This subsection applies where—

(a) an employee during any period works for a person (“the relevant person”) who is not his employer;

(b) any payment of, or on account of, assessable income of the employee in respect of work done in that period is made by a person who is the employer or an intermediary of the employer [F2 or of the relevant person];

(c) PAYE regulations do not apply to the person making the payment or, if he makes the payment as an intermediary of the employer [F2 or of the relevant person], the employer; and

(d) income tax is not deducted or accounted for in accordance with the regulations by the person making the payment or, if he makes the payment as an intermediary of the employer [F2 or of the relevant person], the employer.

(2) Where subsection (1) above applies, the relevant person shall be treated, for the purposes of PAYE regulations, as making a payment of the assessable income of the employee of an amount equal to the amount determined in accordance with subsection (3) below.

(3) The amount referred to is—

(a) if the amount of the payment actually made is an amount to which the recipient is entitled after deduction of any income tax, the aggregate of the amount of that payment and the amount of any income tax due; and

(b) in any other case, the amount of the payment actually made.

[F3 (3A) Where, by virtue of any of sections 203F to 203I, an employer would be treated for the purposes of PAYE regulations (if they applied to him) as making a payment of any amount to an employee, this section shall have effect—

(a) as if the employer were also to be treated for the purposes of this section as making an actual payment of that amount; and

(b) as if paragraph (a) of subsection (3) above were omitted.

(3B) References in this section to the making of any payment by an intermediary of the relevant person shall be construed in accordance with subsection (4) of section 203B as if references in that subsection to the employer were references to the relevant person.]

(4) In this section and sections 203D and 203E “work”, in relation to an employee, means the performance of any duties of the office or employment of the employee and any reference to his working shall be construed accordingly.

(5) Subsections (4) and (5) of section 203B apply for the purposes of this section as they apply for the purposes of that section.]

Textual Amendments

F1 Ss. 203C-203E inserted (3.5.1994) by Finance Act 1994 (c. 9), s. 126

F2 Words in s. 203C(1)(b)(c)(d) inserted (with effect in accordance with s. 69(5) of the amending Act) by Finance Act 1998 (c. 36), s. 69(1) (with s. 69(6))

F3 S. 203C(3A)(3B) inserted (with effect in accordance with s. 69(5) of the amending Act) by Finance Act 1998 (c. 36), s. 69(2) (with s. 69(6))