PAYE81950 - PAYE operation: international employments: PAYE special arrangement for short term business visitors (STBV) appendix 8
Source: gov.uk (2025-09-09)


Pay As You Earn (PAYE) special arrangement for Short Term Business Visitors (STBV) Appendix 8

The PAYE special arrangement for STBVs introduced in 2015 under PAYE Regulation 141 ceased on 5 April 2020 (guidance on this is at PAYE81949 ). This new arrangement, known as Appendix 8, (also agreed under PAYE Regulation 141), permits employers of STBVs taxable in the UK, including those who are employed from overseas branches and visitors from non-DTA countries to pay and report tax in respect of PAYE income by 31 May (following the end of the relevant tax year) if the normal operation of PAYE is considered ‘impracticable’ and can be entered in to from 6 April 2020 (with the first payment and return being due by 31 May 2021).

Why has the arrangement been made?

In Budget 2018, the Chancellor announced that the Government was minded to widen eligibility for the STBV Pay As You Earn (PAYE) special arrangement, and extend its deadlines for reporting and paying tax with effect from 6 April 2020.

Who does it cover?

UK based employers who operate internationally. Many countries will be covered by a Double Taxation Treaty with the UK, but not all. These employers may also have branches overseas. It will often be normal business practice to require non-resident employees to come into the UK to work for them and a liability to UK PAYE will arise.

However, in most cases these non-resident employees will only work in the UK for a short period of time usually no more than a few days or weeks. There can be a significant employer burden in monitoring employee movements and keeping all the records that are required so that PAYE can be reported in real time. If the employees are eligible for personal allowances, then in most cases there is ultimately no UK tax liability.

This arrangement allows the employer to return the information at month 12. This means that employees with no overall liability do not need to have tax deducted and apply for repayments through Self Assessment.

However, any STBVs who meet the conditions for EP Appendix 4 should be reported under that arrangement. EP Appendix 4 applies to individuals who are:
- Resident in a country which the UK has a Double Taxation Agreement under which the Dependent Personal Services / Income from Employment Article applies (Article 15 or the equivalent) is likely to be competent
- Coming to work in the UK for a UK company or the UK branch of an overseas company, or are
- Legally employed by a UK resident employer, but economically employed by a separate non-resident entity
- Expected to stay in the UK for 183 days or less in any twelve month period
You can find further guidance on this agreement at PAYE82000 (https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye82000).

Non-resident directors of the UK company must not be included in this arrangement.

What does it cover?

The special arrangement covers relevant payments of PAYE income and/or taxable benefits in kind provided to the STBV for the tax year that the arrangement is signed and any subsequent tax years until it is either terminated or reviewed.

The UK employer will total all relevant payments made by both the UK employer and home country employer to the STBV for UK workdays in the year and pay the tax due to HMRC. This will take into account Personal Allowances where appropriate, based on the tax tables at month 12 of the relevant tax year. If the employee is covered by employer tax equalisation arrangements, the tax must be grossed up within the calculation.

If the UK employer provides a benefit in kind to a STBV, they are not required to prepare a Form P11D in respect of that benefit. However, they must include the cash equivalent of the benefit and any other benefit provided by the home country employer (calculated in accordance with relevant sections of the Income Tax [Earnings and Pensions] Act 2003) within any month 12 calculations they are making for the PAYE income paid to these employees.

If the employer bears the tax on the provision of the benefit in kind, the amount of the tax must also be grossed up within the calculation.

The arrangement only applies to a STBV whose UK workdays in the tax year total 60 days or less. This limit will not be relaxed, and the employer will not be able to pay any tax via other methods, such as PAYE Settlement Agreement. The employer must include any STBV whose UK workdays total more than 60 days in their regular payroll or, if applicable, in accordance with EP Appendix 6 (https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye82002).

The 60 UK workdays do not include those days where only incidental duties were performed in a tax year. Guidance on incidental duties is in the Employment Income Manual (EIM) at EIM40203 (https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim40203).

The 60 UK workdays does not include any day where the conditions for a PAYE Special Arrangements under EP Appendix 4 are met in respect of a whole day.

Employers must determine whether days of travel to or from the UK are to be counted as UK workdays. Employers may apply the rule of thumb at EIM77020 (https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim77020).

However, where the STBV undertakes UK work other than travel on the day of arrival or departure, an overseas workday should be replaced by a half UK workday and a half overseas workday.

How do employers apply for a Special Arrangement?

A copy of the arrangement that will need to be submitted by the employer is shown at PAYE82008 (https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye82008)

Details of where to submit the Special Arrangement application are contained in the application form see PAYE82008 (https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye82008)

Annual PAYE scheme

Upon receipt and acceptance of the Appendix 8 application, HMRC will set up an annual PAYE Scheme to enable the employer to account for the tax on the payments made and the cash equivalent of any benefits provided to employees covered by this arrangement.

The UK employer must report the relevant payments made and/or the cash value of any benefits in kind provided for the UK workdays to one or more STBV(s) in that tax year on an RTI submission. These schemes RTI submissions must be delivered to HMRC by 31 May following the end of the relevant tax year up until the scheme is closed by HMRC or the employer. If there are no employees eligible to be included in a tax year, a nil submission must be filed by the deadline of 31 May.

The return must be made using an approved method of electronic communications.

Only one Appendix 8 scheme is permitted per each individual UK company or UK branch of an overseas company covered by this arrangement.

Payment of tax

Tax is due on the payments made and any benefits provided by 31 May following the end of the relevant tax year.

The payment must be made using a 17-character reference, which is made up of the 13-character Accounts Office reference, followed by the last two digits of the year and the month of the tax period. The month used should always be 12.

For example, using tax year ending 2021, the reference format would be 123PP001234562112.

Interest will be charged on any tax due which is paid late.

Treatment of any taxable benefits in kind

The employer must gross up the tax liability on the benefits in kind unless they recover the tax from the employee. A gross up of tax on PAYE income will only be required where the STBV is covered by employer tax equalisation arrangements.

Ending the Special Arrangement

Both the employer and HMRC can terminate the Special Arrangement.

The employer is entitled to cancel the arrangement by giving HMRC written notice of the cancellation. This will take effect from a date agreed by the parties or, if the parties cannot agree, the earlier of the end of a period of 3 months from the date of issue of the notice or 6 April following the tax year in which the cancellation notice is given.

If the employer terminates the arrangement, the PAYE Regulations will apply to the relevant payments and form(s) P11D must be prepared in respect of benefits in kind provided to a STBV by the UK employer from the date that the cancellation notice takes effect.

If there is
- an amendment to legislation which has a consequential effect on the arrangement;
- any change to a material fact which was a relevant factor in HMRC’s decision to enter into the arrangement; or
- any operational difficulty which arises as a result of operating this arrangement.
HMRC can review the arrangement and where it considers the employer has not complied with its terms, it can cancel it by giving a cancellation notice in writing. This will take effect from a date agreed or, if not agreed, the earlier of the end of a period of 3 months from the date of issue or 6 April following the tax year in which the cancellation notice is given.

Following cancellation, the employer will be required to submit:
- Payments in real time, and
- Form(s) P11D in respect of any benefits in kind provided
Self Assessment

HMRC does not expect employees under this arrangement to submit SA returns unless they have another UK tax liability.

If a STBV needs to complete a UK tax return for other reasons, then the STBV would also need to include all Appendix 8 earnings within the Employment page.

National Insurance contributions

The arrangement is agreed under the authority of the PAYE Regulations and there is no equivalent legislation for National Insurance. Any STBV who has a Class 1 NICs liability cannot be included and any Class 1 NICs must be paid within the relevant earnings period.

Any requests to review this decision should be referred to the Expat Team within Business Tax & Customs.

2020 to 2021 tax year

Due to the COVID-19 outbreak and accompanying advice from HM Government, HMRC have agreed to extend the deadline for the 2020 to 2021 returns and payment to 30 June 2021.