August 2019
NT Codes are generally issued to payroll when an employee is sent on an assignment outside of the UK and they are no longer a UK tax resident. Applying an NT code means that the employer does not have to operate PAYE on employment income relating to non-UK work duties, however this doesn’t relate to National Insurance contributions and this will have to be reviewed separately.
NT codes should take effect from the departure date to prevent double taxation, so it is imperative that you complete the relevant forms and send them to HMRC prior to employee commencing their assignment.
HMRC has advised that a letter including the relevant information will suffice, however in some cases HMRC are still requesting a departure form P85 is completed.
Andrew Bailey
andrew.bailey@bdo.co.uk