UK: Prepare for end of the tax year - for mobile employee population

Recommended actions

Actions that need to be taken with respect to mobile employees are:

• Apply for a new section 690 application for 2025/26 – this applies to anyone who needs a section 690 application for 2025/26 even if they already have one for that year.  Due to the introduction of the FIG regime, HMRC is requiring that all section 690 applications are resubmitted for the 2025/26 tax year, whether the individual is relying on overseas workday relief or not.  Given the change in process, these applications are now effective from the date that HMRC acknowledges receipt and so companies do not need to wait for HMRC approval to apply them.  The application is made through the Government Gateway.
• Review whether any employees will have their relief restricted due to limits (see below).
• Assess whether there are any changes to the employee population that benefit from relief given the change in rules (see below).

As a brief reminder, the following actions also need to be taken with respect to mobile employees:

• Submit the Short-Term Business Visitor report by 31 May 2025 for any individuals in the UK benefiting from double tax treaty relief.
• Operate annual payroll by 31 May 2025 for anyone on an annual payroll arrangement.  This involves an RTI submission and payment of any taxes due.

Background

Section 690 applications are agreements with HMRC to apply reduced withholding based on an estimate of the individual’s UK work days.  They can be applied for by employees who are (a) non-UK tax resident (including non-resident under a double tax treaty) and (b) UK tax resident but subject to foreign employment income relief (previously overseas workday relief).  They can apply for up to three tax years. 

Employees then true up their position based on actual UK work days through their self-assessment at the end of the tax year. 

With the removal of non-domicile status from 6 April 2026, HMRC has introduced the FIG regime for people moving to the UK.  This has led to the following changes compared with overseas workday relief to date:

• The new FIG regime can apply for the first four tax years (or parts thereof) after moving to the UK, rather than three.
• Employees must have been not a UK tax resident for at least 10 years prior to moving to the UK as the concept of domicile is being removed.
• The amount of relief is limited to the lesser of 30% of qualifying income and GBP 300,000.
• Amounts do not need to be kept offshore to qualify for relief and so amounts paid into a UK bank account could benefit from relief.
• Employees must apply for relief for a tax year via their self-assessment return.