When employees are sent on assignment to the UK, they may continue to be paid from the home-country payroll system. However, UK law still requires employers to calculate, withhold, and report tax through the PAYE (Pay As You Earn) system.
This is where a shadow payroll comes in. It allows employers to meet UK tax and social security obligations while the employee continues to be paid through the home-country payroll.
A shadow payroll is a second payroll run in the host country, in this case the UK, with the sole purpose of ensuring compliance with local tax and reporting requirements.
Employing internationally mobile staff often creates situations where tax and/or social security withholding is required in a country where you do not have your usual payroll. A UK shadow payroll bridges this gap, ensuring HMRC receives the correct PAYE and National Insurance deductions.
We can advise on how to establish and run a UK shadow payroll, and we work with your payroll teams to ensure the necessary transfer of salary and benefits data between home and host locations. This ensures accurate shadow payroll calculations and compliant submissions.
A UK shadow payroll is typically required when:
In addition to shadow payroll reporting, most assignees will also need to file a UK Self Assessment income tax return. This reconciles their UK tax position and applies treaty reliefs where relevant. Employers usually arrange this on behalf of assignees as part of the global mobility support package.
At Türner & Co, we provide a complete service package:
Read more on our Inbound Employees Working Temporarily in the UK page.
Operating a shadow payroll is a legal requirement in the UK. Without one, employers risk:
By outsourcing your UK shadow payroll to us, you gain peace of mind that your reporting is accurate, compliant, and aligned with your global mobility policies.
A shadow payroll is a second payroll operated in the UK alongside the employee’s home-country payroll. It does not make salary payments, but it ensures that the portion of salary and benefits relating to UK workdays is correctly reported to HMRC for tax and National Insurance purposes.
A shadow payroll is required because UK tax and social security rules apply when an employee works in the UK, even if they remain on the home-country payroll. Without it, employers risk non-compliance with PAYE reporting, penalties from HMRC, and double taxation for employees.
No. The shadow payroll is a reporting mechanism only. Employees continue to be paid through their home payroll as normal, and the UK shadow payroll is “netted to zero.” Its sole purpose is to calculate and remit the correct UK withholdings.
Yes, in most cases. Employees reported through a UK shadow payroll will also need to submit a UK Self Assessment income tax return. This reconciles their overall UK tax position, applies treaty reliefs where available, and ensures full compliance. Employers typically arrange this as part of the support package for assignees.
We provide a complete service:
Senior Manager
Head of Direct Taxes
Sarah is our Head of Direct Taxes and advises on both corporate and personal tax matters, including capital gains tax. She specialises in international tax, helping clients determine whether the UK has taxing rights — and if so, to what extent. Whether it’s assessing if a company or individual is UK tax resident under domestic law, or applying double tax treaties to resolve dual residency questions, Sarah guides clients through complex cross-border issues with clarity.
Sarah also advises overseas businesses on whether they have a UK permanent establishment for corporation tax purposes and supports individuals with a wide range of UK income tax matters — from non-resident landlords to those newly tax resident in the UK — helping them stay compliant and pay the right amount of tax.
Assistant Manager
Payroll
Jack is an Assistant Manager in our payroll team and plays a key role in the day-to-day running of our monthly payrolls. He works closely with clients to gather all the information needed each month and makes sure salary calculations are accurate, and payslips are delivered on time. He also prepares and submits monthly reports to HMRC and ensures pension contributions are reported to the relevant pension scheme on time. By helping clients stay compliant with the UK’s workplace pension rules and payroll reporting requirements, Jack ensures everything runs smoothly and employees are paid accurately and on schedule.
