As the new Tax Year approaches, Brian Cluskey introduces diplomats and embassy local staff to the HMRC Embassy Unit – what they do and how they can help you
The HM Revenue and Customs (HMRC) Embassy Unit handle enquiries from embassies, financial attachés, and their employees about a wide range of tax issues including double taxation, stamp and land duty and National Insurance Contributions (NIC’s). Some embassy employees contact the unit for a simple records update, while others may want end-to-end guidance on setting themselves up as self-employed. Whatever the nature of your tax query, the Embassy Unit can advise you directly or signpost you to the most appropriate support service.
Simplifying tax for embassy employees
The head of the HMRC Embassy Unit, Brian Cluskey, recently met with several High Commission delegates to discuss how the department can further support embassy staff with their tax affairs and simplify processes. As part of these conversations, Brian demonstrated the benefits of setting up Pay As You Earn (PAYE) schemes for embassy employees, resulting in a number of missions adopting them.
Even though there is no obligation to deduct tax or National Insurance Contributions (NICs) from your employees, we offer a number of voluntary PAYE schemes which can make it simpler for you to account for your employees’ Income Tax and/or NICs. Missions using these schemes have found that making these deductions is very popular with their staff.
Embassies have the option to implement a PAYE scheme that collects either NICs only, or one that collects Income Tax and NICs. The Embassy Unit are always on hand to discuss the set-up of PAYE schemes and can assist in setting-up the software to help with processing payroll. Advice on commercial software options can also be found on the HMRC guidance pages. Some embassies have decided to operate a full PAYE scheme because they know it gives peace of mind to local staff who are confident that their Income Tax and NICs are properly taken care of.
For missions not operating a PAYE scheme, the responsibility lies with employees to ensure that the correct deductions and submissions are made and paid to HMRC. These individuals will be set up with either a DCNI (Direct Collection scheme for National Insurance) or DPNI (Direct Collection scheme for Tax and National Insurance). To support staff operating under DCNI or DPNI, we encourage embassies to ensure that they complete ‘HMRC New Starter’ forms for all their new employees. The information provided in these forms allows HMRC to assess whether staff are paying the correct tax and NICs.
The HMRC Embassy Unit will guide and support any embassy wanting to set up a PAYE scheme, and will continue to offer support with day-to-day tax or NIC’s queries.
We have recently written to a number of embassies emphasising the benefits of operating a PAYE scheme, but if you want more information, please visit our guidance by following the links below or contact us direct.
HMRC Embassy Unit- telephone 03000 516604
HMRC Embassy Unit email firstname.lastname@example.org
HMRC Employer guidance- https://www.gov.uk/paye-for-employers
HMRC PAYE- https://www.gov.uk/basic-paye-tools
HMRC approved payroll software- https://www.gov.uk/guidance/find-payroll-software-that-is-recognised-by-hmrc
Photo: Brian Cluskey and the Embassy Unit at HMRC meet new diplomats at the Embassy Induction Seminar