Overview of Overseas Workday Relief and New Requirements
From 6 April 2025, the UK introduced major changes to how Overseas Workday Relief (OWR) works. Qualifying new residents may claim relief based on foreign employment duties—subject to limits. (gov.uk)
As of 6 April 2026, further adjustments impact employers' filing and PAYE notifications regarding globally mobile employees. Employers must ensure estimates of non-UK earnings don't exceed 30% when completing PAYE notification forms for eligible employees. (gov.uk)
Compliance Steps for Employees and Employers
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Qualifying new resident must determine if they meet the criteria: arrival date, residence status, and income structure. Relief is allowed up to the lower of 30% of qualifying employment income or £300,000 per qualifying year. (gov.uk)
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Employers must send updated PAYE notifications (formerly “section 690” forms) specifying percentage of income subject to PAYE. From 6 April 2026, ensure those percentages reflect a best estimate and not more than 30% non-UK earnings. (gov.uk)
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Transitional provisions apply. Some employees subject to earlier rules may continue under them. Employers and employees should double-check residency and treaty circumstances. (gov.uk)
Practical Guidance for Globally Mobile Individuals
- Maintain detailed records of days worked abroad vs days worked in the UK. These help support OWR claims and PAYE allocations.
- When entering into contracts, clarify which income relates to non-UK work and whether deductions apply.
- If the percentage of non-UK income estimate is wrong and you exceed 30%, there could be underpayments; consider adjusting estimates mid-year if necessary.
Example Case
Oliver moves to the UK and becomes resident on 1 May 2025. He works 60% of his time in the UK and 40% abroad. He is a qualifying new resident, so for his 2025-26 year, he may make an OWR election. He estimates that 40% of his employment duties are outside the UK. But since the OWR limit means the ratio of non-UK earnings through PAYE notifications must not exceed 30%, Oliver and his employer should instead input 30% as the non-UK share for PAYE purposes. He can still claim more up to the limits via self-assessment later if properly documented, but PAYE must stay within 30%.
Bottom Line: Employers and global employees must carefully estimate non-UK income, stay under the 30% threshold for PAYE filing, and keep records to support any relief claimed.