April Action Required for All Employers With Active Section 690 Directions

Global Mobility Services

In their March bulletin issued to agents, HMRC confirmed that, along with the expected changes to the taxation of non-domiciled individuals, the process for applying for a Section 690 direction to operate PAYE on only a proportion of a globally mobile employee’s income is changing.

In more pressing news, HMRC has confirmed that all existing Section 690 directions issued before 6 April 2025 will cease to have effect from this date. This means that any current directions effective for the 2025/26 and later tax years will need to be reapplied for:

“The new process will allow employers and their agents to send HMRC a notification specifying a proportion of income paid to a globally mobile or treaty non-resident employee which will be treated as not being PAYE income.

Employers and agents can notify HMRC using a new online notification form, available from 6 April, allowing them to operate PAYE on the reduced amount of income as soon as HMRC acknowledges receipt of the notification. This should be immediate. Any HMRC directions issued before 6 April 2025 will cease to have effect from that date. This means that if employers wish to operate PAYE on a reduced amount of an eligible employee’s income for the 2025/26 tax year, they will need to submit a new notification.”

While it is good news that the new directions can be operated immediately, action must be taken in all cases where you have employees with a Section 690 direction that you wish to operate for the 2025/26 UK tax year.

All employers should therefore urgently review their existing population of globally mobile employees where a Section 690 is in place.

This may include:

Outbound employees with ongoing taxable UK workdays
Inbound employees who are non-resident (either under the SRT or a double tax treaty) or eligible for Overseas Workday Relief
Short-term business visitors who do not meet the eligibility criteria to be included on the STBV report
Non-resident directors with UK board duties

While we hope the new online form will make the process as straightforward as possible, it will not be released until 6 April. We recommend consulting with your advisor to ensure the correct action is taken for any existing Section 690 directions to be valid for the 2025/26 tax year, ahead of your April payroll cutoff date.

Please get in touch if TAP can assist.