ICB brings you information on the latest update to HMRC booklet CWG2.
This is the ‘further guide to PAYE and National Insurance contributions’, a document we refer to in less common payroll situations. However, having such a document is useless unless we are referring to the most recent version.
The 2025/26 version was published on 12 February 2025 and was updated on the first day of the tax year with a new section housed with the part 4 ‘Special types of employee’. This part contains, for example, the Income Tax and National Insurance Contributions (NICs) implications for employing:
- Harvest casuals
- Employees coming to or leaving the UK – NICs only
- Employees coming to or leaving the UK – Income Tax only
ICB details the changes on 06 April 2025:
4.6.3
This is entitled ‘Employees coming from abroad’ and says that ‘Subject to certain exceptions PAYE must be operated in the usual way for all employees’. It is this section that details the exceptions which is now structured as follows:
- ‘Employees on short-term business visits to the UK — Treaty relief’ – where the requirements to operate PAYE may be relaxed if certain conditions are met regarding double taxation, for example, the UK stay does not exceed 183 days;
- ‘Employee seconded to work in the UK’ – where the obligation to operate PAYE is usually the same as a for an employee who has not been seconded;
4.6.6
This is a new section entitled ‘Employees who work both in the UK and overseas’. The reason this has been inserted is because of changes from tax year 2025/26 affecting employees who are global mobile where income was taxed based on the remittance basis. This basis has been replaced with a new regime based only on residence.
The updated CWG2 refers to the Employment Income Manual for information, however, the link is to the summary page only. If you are impacted by this change, perhaps the link to the relevant page may help (page 43555).
Of course, the addition of this new section has meant that the previous 4.6.6 has been renumbered 4.6.7 (‘Tax code for payroll purposes for non-resident employees who have never been resident in the UK’).
For Bookkeepers
ICB appreciates that this change may not affect all members, however, we want to highlight you to the first CWG2 guidance change of tax year 2025/26 and remind you to ensure you are referring to the most recent update (dated 06 April 2025).
