Autumn Budget 2025: Global Mobility

Having workers in multiple jurisdictions creates additional administrative burdens for businesses. The UK tax authorities are trying to alleviate these by introducing more online notification systems.

For example, the process for operating PAYE on employees with non-UK income has been modernised. Previously, employers would apply to HMRC for what were known as 'section 690' directions to only operate PAYE on the income relating to an individual's UK duties. However, employers would not be able to do this until they had received written authorisation from HMRC (which could take some time). On 6 April 2025, a new annual online notification system was introduced which allows businesses to operate PAYE on a modified basis as soon as the application has been acknowledged by HMRC. It is important to note that any section 690 directions issued before 6 April 2025 ceased to have effect from that date and needed to be refreshed. Further, unlike the previous system, a new notification needs to be sent for each tax year the modified PAYE basis is to apply.

In Autumn Budget 2025, the Government announced measures limiting the amount of provisional overseas workday relief that can be claimed under the new PAYE annual online notification system to 30% of the employee's income.

The aim of this measure is to ensure that, in most cases, the provisional relief received via PAYE in the relevant tax year does not exceed the overseas workday relief that the employee is actually able to claim when they later file their self-assessment tax return (which from 6 April 2025 has been restricted to the lower of £300,000 or 30% of the employee's income). This aligns with the wider intent of PAYE which is to collect the right amount of the employee’s income tax liability on their PAYE income when it is paid.

This measure will take effect from 6 April 2026.

The UK Government has announced that it will explore ways of further developing its tax offer for high-talent new arrivals, to build on the success of the existing regime and bolster the ambition for the UK to remain a competitive destination for growth - driving global talent and supporting internationally mobile individuals to establish themselves and their businesses in the UK.

The Government will seek views in due course to inform the design and scope of any potential enhanced offer.

Dividends paid to temporary non-residents that relate to "post-departure trading profits" will no longer be automatically exempt from UK income tax.

Instead, such dividends will be subject to the same anti-avoidance rules as other dividends or distributions paid to temporary non-residents, meaning they could fall within the scope of UK income tax.

This is a tightening of rules for the globally mobile and keeps them further within the UK tax net. It will be legislated for in Finance Bill 2025-26 and take effect from 6 April 2026.

The UK Government has announced that certain minor administrative amendments will be made to the legislation introduced in April 2025 relating to the new residence-based tax regime (and the removal of the concept of domicile from the UK tax system).

These will be relevant to anyone impacted by the Foreign Income and Gains (FIG) relief, overseas workday relief or the temporary repatriation facility available for those who have previously claimed the remittance basis.

The legislation will introduce minor amendments intended to ensure that the legislation and the reliefs operate as intended and will have negligible economic impact.

Where relevant, the amendments shall apply retrospectively to 6 April 2025, although some will come into effect in April 2026.

For information on global mobility please visit our dedicated Global mobility web page.