18 September 2025 UK's HMRC publishes guidance regarding treatment on cash bonuses for internationally mobile employees and permanent transfers HMRC has published guidance which instructs employers to apportion cash bonuses according to the period an internationally mobile employee (IME) was subject to National Insurance contributions (NICs) during the period it was earned. HMRC believes it can apply this approach retrospectively (typically six years) and is asking employers to review the treatment over this period, and to make payroll adjustments where NICs have been under or overpaid. The guidance states that other cash payments, e.g., salary, termination payments and lump sum payments should also be apportioned for NICs where appropriate. This could have a significant impact for employers operating an "all or nothing" (receipts basis) approach for NICs in terms of audit risk, cost, and administrative burden in respect of both IMEs and permanent transfers (PTs) on a go forward and historic basis. A Tax Alert prepared by EY's People Advisory Services, and attached below, provides additional details. Document ID: 2025-1883 |
