Income Tax (Earnings and Pensions) Act 2003 section 690C

Employees who were internationally mobile etc. before 2025-26

Section 690C provides transitional rules for operating PAYE on payments to employees who were internationally mobile in tax years before 2025-26, allowing employers to restrict the amount treated as PAYE income to a best estimate of what is actually taxable.

• This section applies where an employee was internationally mobile in a tax year before 2025-26, either by working both inside and outside the UK while being (or likely being) non-UK resident or in a split year, or by working outside the UK while meeting the overseas workday relief requirements and claiming (or likely claiming) the remittance basis.
• When the employer makes a payment of general earnings relating to that pre-2025-26 tax year, only the portion reasonably estimated to be PAYE income needs to be put through PAYE — not the full payment.
• Where the employer has acted on the basis that a particular state of affairs appeared likely (for example, that the employee was non-UK resident), the employer may assume that state of affairs actually exists when calculating the PAYE amount.
• Whether general earnings relate to a particular tax year is determined by the existing rules in sections 29 and 30 of ITEPA 2003, which govern when earnings are treated as being "for" a given year.

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