Myth-buster · Overseas employers
Do you need a UK company to hire an employee in the UK?
It is the first thing most overseas employers assume they have to do. For a single UK hire, it is almost always the one thing they do not have to do.
It is the first thing most overseas employers assume they have to do. For a single UK hire, it is almost always the one thing they do not have to do.
Usually, no. You can employ someone in the UK without setting up a UK company. It is one of the most common assumptions overseas employers make, that a UK hire means incorporating a UK entity first, and for a single hire it is almost always unnecessary.
Here is why, when a UK company does still make sense, and how you pay a UK employee without one.
For most non-EU employers the route is a DPNI scheme, a direct payment scheme that HMRC sets up in the employee's name, and it exists precisely so that an overseas employer with no UK presence can run compliant UK payroll. If your company is based in the EU or EEA, employer’s National Insurance is usually due as well, and HMRC’s route is then an NI-only scheme, which is registered in the employer’s name rather than the employee’s. We confirm which applies with HMRC before anything is set up.
A specialist runs the scheme for you, so the fact you have no UK office or UK company does not become your admin problem. See what a DPNI scheme is for the full picture, and how to pay a UK employee from abroad for the routes side by side.
Setting up a UK entity is the right call in some situations, just not usually for the sake of payroll alone. It is worth considering when:
If one of those applies, a UK company plus a standard PAYE scheme may be the better structure. If none does, you are taking on UK accounts, corporation tax and ongoing filings for no real benefit, when a DPNI scheme would have done the job.
A UK company gives you a local presence and more flexibility, at the cost of more admin, filings and running expense. A DPNI scheme keeps things lean, no entity, no UK corporation tax return, no annual accounts, just compliant payroll for the person you actually want to employ. For most overseas employers making their first UK hire, lean wins.
A quick illustration
Picture a fictional agricultural machinery maker in Santiago that has taken on a technical sales manager in Shrewsbury to look after its UK dealers. It sells through those dealers rather than contracting in the UK itself, it has no plans to open a UK office, and it does not need a UK bank account or a UK VAT registration. Incorporating here would give it a set of UK filings and nothing it actually wants. A scheme in the sales manager's name covers the payroll, and the company carries on employing its own person directly.
If your company is abroad and you want to employ one person in the UK, you almost certainly do not need to incorporate. Tell us your situation and we will confirm whether a DPNI scheme is the right route for you, or whether a UK entity genuinely makes sense, and give you a fixed price either way. Our DPNI scheme fee is a fixed £157 a month per scheme, run for you.
There is a one-off HMRC scheme setup on top, £500 with the early-onboarding discount, or £750 standard. Those are the rates as they stand for the 2026/27 tax year. Salary, any employer's National Insurance and the pension sit outside that and are the same whoever runs the payroll.
Usually not. A DPNI scheme lets an overseas employer run compliant UK payroll with no UK entity, so for a single hire you can employ someone in the UK without incorporating.
Yes. Under a DPNI scheme the employee is legally and properly employed, gets a real UK payslip, and has Income Tax, National Insurance and pension handled correctly. You remain the direct employer.
When it is scaling a UK team, needs to contract or trade as a UK business, expects to register for VAT, is raising UK funding, or wants limited liability in the UK. If it is only about paying one employee, a DPNI scheme is usually simpler and cheaper.
A DPNI scheme run for you is a fixed £157 a month per scheme, plus a one-off HMRC scheme setup. There is no UK company to file accounts or corporation tax for, which keeps the running cost and admin down.
This page is general information, not tax or legal advice. Whether a UK entity is right for you depends on your own circumstances, so please check your position or get advice before acting.
Where your company is, where your employee is, and roughly what they are paid. We will tell you whether a DPNI scheme covers it or a UK entity is genuinely worth setting up, and give you a fixed fee. Within one UK business day.
Get my fixed quoteQuick enquiry, we reply within 1 UK business day