The Offshore Tax division of SKP has been working for the past seven years, in the field of
Payroll Management & Processing Services for UK Companies with an India presence. Mr
Prakash Hamirwasia, who heads SKP’s Offshore Tax division, in an interview gives us the
lowdown on UK Payroll Management.
- Can you tell us briefly, what does UK
There are two facets to UK payroll‐
One, you may hire local people directly in
the UK for carrying out your UK operations,
in which case the UK payroll tax
calculations and the other payroll
compliances for the employer are relatively
And/or, you may send your Indian
employees on deputation to UK for onsite
projects assignments for a fixed tenure. In
this case, the UK payroll compliances
including the tax calculations are different
and involve various factors from efficient
salary structuring to strict administration of
all the UK compliances by the employer.
Moreover, the employer is also required to
comply with the Indian tax laws related to the employment.
We help companies with all the
compliance requirements including the
payroll calculations for local employees as
well as for deputed employees in the UK.
- Why is there an emphasis on salary
structure for deputed employees ?
In case of deputed employees, the employer
has to comply with the tax laws of India as
well as UK, which often leads to double
taxation in the hands of the employee.
At SKP, we leverage our understanding of
the India UK tax environment and our hands
on experience of handling the payroll of a
UK organisation to help companies design
the salary structure for the deputed
employees. This reduces the overall
exposure of tax in the hands of the employee as well as the company.
- Can you specify some of the unique aspects
of tax processing that could benefit UK
Companies having expat employees?
The employees who are deputed to work
on specific assignments, for a limited
duration, are generally paid allowances in
the UK to meet their day to day travelling
and subsistence expenses (like
accommodation, food, etc.). These
expenses are necessarily incurred by the
employees for performing their
employment duties. However, the
employer has to deduct UK taxes on the
allowances paid in the UK. Under certain
circumstances, the company can claim
exemption on the amount of allowance for which valid supporting/vouchers of the
actual travel/subsistence expenses are
submitted. HMRC may allow such
exemption for the expatriate employees
(on an application made to it) by either
defining a fixed scale rate of exemption or
on the basis of actual supporting.
SKP helps companies in implementing the
process of claiming exemption of travel/
subsistence expenses in accordance with
the HMRC compliance requirement,
including collecting the supportings/
vouchers from the employees and
calculating the exemption amount.
- Does payroll processing involve liaising
with HMRC from time to time for various
form submissions and resolving queries?
Payroll processing in UK also includes
various administrative compliances
defined by HMRC which involves online/
hard copy submission of forms (like P46,
P85, P45, etc.) and providing information
to HMRC from time to time.
As part of the payroll process SKP acts on behalf of clients and deals with HMRC
directly to do all the required submissions,
whether online or hard copy, and provide
information to HMRC.
- Are deputed employees also required to
file their individual tax returns in the UK?
It most cases it is mandatory for the Nondomiciled
and/or Non‐resident individuals
in the UK to file their tax returns in the UK.
HMRC has introduced new Residence and
Remittance basis rules which require all the
Non domiciled employees to include their
worldwide income in the UK tax return on
the arising basis or the remittance basis. It
is important to identify and analyse all non
UK income of the employees for the
purpose of inclusion in the UK tax returns.
SKP provides this add‐on service where it
prepares the UK tax returns of the deputed
employees, collecting information from the
employees, analysing the Indian income as
per the new remittance rules, preparing the
tax computation, compiling the tax return
and submitting it to HMRC.
SKP is a full‐fledged professional services
group in India, providing a wide range of services‐ crossborder business set‐up,
corporate services, international tax and
transfer pricing, assurance and risk
management, and outsourcing services.
As part of outsourcing services we have 7
years of experience in handling UK tax
returns and 5 years of experience in payroll
processing involving expatriate tax
expertise of a 2,000+ people organisation in
the UK. The payroll services are being
provided out of our Pune Office with backup
advice by our UK associate firm of
accountants, wherever required. This
provides clients a contact in India with UK
expertise delivered locally. Our Quality
Management System and Information
Security Management Systems are ISO
certified. We can provide end to end UK
payroll services with complete assurance of