PAYE28013 - employer records: modified PAYE schemes: employees seconded abroad - EP appendix 7B arrangements from April 2006 (Action Guide)


Note: For arrangements made before 5 April 2006 see PAYE28012.

To deal with a request from an employer to operate modified PAYE under Employment Procedures Appendix 7B follow steps 1 - 9 below. The Guide is presented as follows

When an employer contacts you to advise that they have employees seconded abroadStep 1
When you receive an application from an employer to operate modified NIC payments in accordance with EP Appendix 7BStep 2
Review of EP Appendix 7B applicationSteps 3 - 4
Where an application to operate modified PAYE under EP Appendix 7B is acceptedSteps 5 - 6
Annual review of the employer-related electronic fileSteps 7 - 9


For details of how to access any of the Employer Business Service functions use the [Index of Functions] button on the left of the screen.

When an employer contacts you to advise that they have employees seconded abroad

  1. Advise the employer that they have to make an application to operate modified NIC payments in accordance with EP Appendix 7B

When you receive an application from an employer to operate modified NIC payments in accordance with EP Appendix 7B

  1. Check whether the PAYE scheme for the employer is a separate 'dedicated' PAYE scheme

  • If yes, forward the EP Appendix 7B application to your associated Expatriate Team
  • If no, forward the EP Appendix 7B application to a colleague of Officer Grade (Band D) or above to review

Review of EP Appendix 7B application

  1. Has the application met all four of the following conditions for the employees

  • Seconded abroad
  • Non- resident and not liable for UK tax
  • Pay UK NICs on earnings in excess of the annual Upper Earnings Limit

And

  • Receive part of their earnings from a payroll abroad
  1. Ensure that all the above conditions are met

  • If all conditions are met accept the application - go to step 5

Or

  • If all conditions are not met, refuse the application and return it to the employer

Where an application to operate modified PAYE under EP Appendix 7B is accepted

  1. Use EBS Function Employer Set Up to create an employer record using the following

  • Scheme type DCNI
  • Enter '(EP Appendix 7B)' after the employer name for example 'A456 Ltd (EP Appendix 7B)
  1. Insert an item in the employer-related electronic file 'Employer with employees seconded abroad - earnings paid by overseas companies'

Annual review of the employer-related electronic file

The employer-related electronic file 'Employer with employees seconded abroad - earnings paid by overseas companies' must be reviewed in April each year.

For each entry where there was an EP Appendix 7B arrangement to defer NIC payments for CY-1 you must


  1. Use Function VIEW EOY RETURNS HISTORY to check whether a return has been received for CY-1

  • If a return has been received and the date it was recorded as received is 31/03/CY or earlier go to step 10
  • If a return has not been received, request the return then go to step 8

Or

  • If a return was received after 31/03/CY go to step 8
  1. Forward the following details to the Penalty officer to consider raising penalties

  • Employer name
  • Employer PAYE reference
  • The Year the NIC Settlement Return was not received or received late
  1. Use Function VIEW BROCS, Formats 2& 3, to establish if the NIC liability has been paid and that all payments were made by 31/03/CY

  • If payment was received is 31/03/CY or earlier, no further action is required
  • If payment has not been received or was received after 31/03/CY contact the Debt Management Office and advise them that interest will need to be calculated on all payments made after 19 April

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