"PAYE is the system used by employers to take Income Tax and National Insurance Contributions from employee's earnings. While Double Tax Treaties may protect international businesses and individuals from being taxed both by their country of origin and by HMRC on their UK earnings, the UK doesn't have a Double Tax Treaty with Lapland and so PAYE could be due for the elves on a 'day one' basis."
"Santa or other entrepreneurs could be on HMRC's naughty list if he hasn't been handling his UK PAYE obligations correctly. He cannot pass the blame for this onto his elves, as the employer is normally considered to be responsible for PAYE arrangements in these circumstances. They may also be liable to additional payroll-related obligations such as ensuring the elves are paid the National Minimum Wage."
Employers must operate PAYE to withhold Income Tax and National Insurance from employees' earnings or face HMRC penalties. Double Tax Treaties can prevent double taxation, but the UK lacks a treaty with Lapland, making PAYE liable from day one for elves working in the UK. The employer, not the employees, normally bears responsibility for PAYE arrangements and related payroll obligations. Employers may also need to ensure workers receive at least the National Minimum Wage, currently £12.21 for those aged 21 or over, rising to £12.71 in April next year. Failure risks fines and negative publicity.
Read at London Business News | Londonlovesbusiness.com
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