If you live in the UK and work for an overseas employer that does not have a UK payroll scheme then you might need to setup a DPNI scheme, as you will likely need to pay tax on your salary and National Insurance contributions. HMRC have created this scheme for individuals to create their own personal payroll.
How Does It Work?
Once the scheme is setup and the individual receives their payroll (PAYE) reference details, you will be required to process monthly submission to HMRC using a UK payroll software. Depending on the amount of tax and NI owed to HMRC, you may need to pay monthly or quarterly tax/NI payments to HMRC.
Types of schemes
There are 3 possible schemes that could be established depending on the individuals’ circumstances –
- Direct Collection (employee only NICs) where direct payment of primary Class 1 National Insurance only is due.
- Direct Collection (Income Tax only) where deduction of Income Tax only is due.
- Direct Payment (Income Tax and NICs) where direct payment of primary National Insurance only and PAYE Income Tax is due.
How to register
You will need to contact HMRC on 0300 200 3211 and explain to HMRC your circumstances and HMRC will arrange a HMRC technician to call you back to set up the scheme. The process can be complicated and lengthy(up to two months).
You will need to provide HMRC the following information –
- Employee Full name
- Employee Address
- Address where majority of UK duties carried out if this is different from the home address.
- NI Number
- Nationality
- Employer Full name
- Employer address including country
- First Payment date
- Any reimbursements for expenses or any company befits you are receiving
Alternatively you can request your UK accountant to contact HMRC on your behalf to set up the scheme.
