Overseas employer

Where the employer has no UK tax presence the tax position can be complex and advice should be sought from a qualified tax professional.

If the employee files a Tax Return, they will need to include on the Return the gross employment income (in sterling) and tax deducted.

If an employer cannot deduct the full amount of income tax due from employment income they must still account to HMRC for the balance. This is called the ‘due amount’. The employee must reimburse their employer for the ‘due amount’ within 90 days after the end of the tax year. If they do not, then a further income tax charge and national insurance contributions liability will arise on the employee for an amount equal to the ‘due amount’.

Where the employee is UK tax resident but is working for an overseas employer, it is likely that the employee will need to operate a PAYE Direct Payment Scheme themselves on their employment income.

The employee is required to calculate the income tax and national insurance due on their cryptoassets employment income and declare this to HMRC on RTI returns each time they are paid. The employee also pays the income tax and national insurance to HMRC each month.

If the employee files a UK Tax Return, they will need to include on the Return the gross employment income (in sterling) and tax deducted.