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Assignment v Local Contract

Assignment — UK implications

UK payroll obligation

If Fred was sent on an assignment to Australia, he would remain an employee of the Titanium Ltd and Titanium Ltd would retain a payroll reporting requirement.

For tax purposes, Fred will not be liable to UK tax from his date of departure unless he performs any UK workdays. As such, a NT (No tax) code could be applied for (either by completing Form P85 notifying HMRC that Fred had left the UK or by including a claim on his tax return) so tax would not be required to be deducted on his salary. (Tolley's Global Mobility: Employment Taxes (Europe), United Kingdom, 2.1.2)

If any bonuses were paid that related to a UK resident period, then a proportion of these would remain UK taxable, depending on the earnings period, and Fred would need to settle any tax due on these payments via his self-assessment tax return.

UK NICs

As there is no social security agreement in force between Australia and the