Sonia Kakkar
Human Resource (international Compensation

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This is with respect to taxes for an Indian company employee in UK.
1. Is it necessary to pay pound salary to an employee in UK in HSMP status?
2. Can an employee legally continue to be on Indian payroll and work in UK in HSMP status- can we pay him indian salary + pound per diem
3. What are Co's tax liabilities for an HSMP employee in UK

1. Employees on WP- Salaries can be divided part in India & part in UK. Specially for Availing Dispensation benefit.
Employees on CoS - Salaries need to match the as per the breakup mention in the CoS. It's Mandatory & can be audited by UK BA Office.
2. yes you can pay per diem + India salary provided you meet the min wages mention in WP or CoS. Only till the time you are availing dispensation benefit which is applicable only for first two years, need to be careful. As WP/ CoS the restriction to pay the min wages, Tax & NI is high.
3. HSMP employees need to be on UK Salary for teh simple reason that they are High Skilled Labours & will get PR only after completion of there HSMP points; for which they have to submit the below documents:
  • Personal Tax Return
  • NI Numbers& details of NI paid out
  • Personal Bank Statements
  • Copies of contracts detailing the contract rate
  • Employement terms & Conditions

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