Commentary on Sections The Income Tax (Offices and Employments) Act 1944 (7&8 Geo. 6. (1943-44) c.12) Machinery of PAYE Section 689: Employee of non-UK employer
2783.This section concerns employees working in the United Kingdom for someone who is not their employer. It derives from section 203C of ICTA.
2784.The section provides for tax to be accounted for under PAYE by the person for whom the employee is working if the employer does not do so. An example is an employee of an overseas company who comes to the United Kingdom to work for a subsidiary but not as an employee of the subsidiary. The employer remains overseas and cannot be required to operate PAYE. It may also be impracticable for it to do so.
2785.Subsection (1)(d) follows the approach taken in section 687. See Note 58 in Annex 2.
2786.Subsection (4) deals with the possibility that income is provided to the employee in the form of a voucher, credit card, readily convertible asset or other way which gives rise to a “notional payment”. It treats any such notional payments in the same way as actual payments for the purposes of this section. But (as with notional payments generally) there is no requirement to “gross up” the notional payment for PAYE purposes.