How we work

Four steps from first email to first payday.

Employing someone in the UK without a UK company sounds complicated. It is four steps, and we do three of them. Here is exactly what happens, in order, so you know what we need from you and when.

Start step one See the prices first

Step 1

We establish the facts that decide which scheme we ask for

Everything else follows from this, so it is the first thing we settle. There is one question underneath it: does your company owe UK employer's National Insurance on this person?

The four scheme types

✓ NI-only scheme. Where employer's National Insurance is due as well as the employee's. The scheme is registered in the employer's name, never the employee's, and one scheme can cover several UK staff. Income tax is paid separately, through Self Assessment or a tax-only scheme. Where an employer also provides expenses and benefits, HMRC set the employer record up as a "P" scheme rather than an NI-only one, because a form P11D(b) and a Class 1A National Insurance charge are expected.
✓ DPNI scheme. HMRC's usual scheme where the employer has no UK address and owes no employer's National Insurance. Income tax and the employee's National Insurance are due, and the DPNI scheme is registered in the employee's name.
✓ DCNI scheme. A rarer scheme HMRC use only for the specific categories set out in their manual at PAYE20090, for example where direct payment arrangements for tax cannot be used or have been cancelled. It collects only the employee's National Insurance, quarterly, with income tax through Self Assessment, and it is registered in the employee's name. It is not a route you or we choose.
✓ Tax-only scheme (DPGEN). Set up by the employee to pay their own income tax where only income tax is due through it, for example beside an employer's NI-only scheme.

How the scheme type is settled, and what we check first

We find the social security agreement that covers your country, read whether it makes you liable for employer's contributions, and tell you which scheme we expect to ask HMRC for, citing the HMRC manual we relied on. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts.

We do not work it out from the map. Two countries that look similar can land in different places, and naming the wrong scheme is expensive to unpick after it is registered.

If your company is in the EU, the EEA or Switzerland and your employee pays UK National Insurance (rather than staying in your home system, for example on a certificate of coverage), expect employer's National Insurance to apply. For most employees that is 15% on pay above £5,000 a year, and it is your cost, not your employee's. HMRC's own manual is clear that in that case the employer sets the scheme up, or asks a UK agent to set it up for them. It is the part that surprises people most, so we say it early rather than at the quote.

One more condition: if your employee works for a UK business that isn't their employer, such as a UK client they're placed with, that business may have to run PAYE and pay employer's National Insurance instead.

You will also have a workplace pension duty. It follows where your employee works, so it applies even with no UK company.

Step 2

Two forms, one each

This is the only step that needs real work from you, and it is the one that decides how fast the rest goes. We send both forms already filled in as far as we can.

From your employee

✓ Full name, date of birth and National Insurance number
✓ UK address, start date, salary and how often they are paid
✓ Their starter declaration, which sets the tax code
✓ Photo ID and proof of address, for our anti-money-laundering checks where your employee is also our client, as on a DPNI

From you, the employer

✓ Company name, registered address and country
✓ Confirmation that you have no UK place of business
✓ Who signs on the company's behalf
✓ On an NI-only scheme, your agreement to hold the scheme in the company's name and to authorise us to deal with HMRC for you

Step 3

You sign, then we talk to HMRC

In that order, always. We do not approach HMRC about anyone who has not engaged us.

The engagement letter

A plain letter setting out what we do, what it costs and what we are responsible for. Signed electronically. Nothing starts before it.

Then the registration

These schemes cannot be registered online. HMRC set them up by hand, and the application has to be right first time. We make it and we deal with HMRC's queries.

How long it takes

Allow four to eight weeks from a complete set of forms to a live scheme. That is our own estimate, based on these being manual applications.

Two rules GOV.UK sets for registering a UK PAYE scheme, worth knowing when you plan a start date (HMRC do not publish the same timings for a direct payment scheme, which is set up by hand):

✓ Register before the first payday
✓ You cannot register more than two months before you start paying someone

So the useful thing to tell us early is the date you want them paid.

Step 4

We run the payroll, every period

Once the scheme is live this becomes routine, and you hear from us on a schedule rather than in a panic.

Each pay period

✓ We calculate the pay, tax and National Insurance
✓ We produce the payslip and send it to your employee
✓ We file the RTI submission to HMRC on or before payday
✓ We tell you exactly what to pay HMRC, and by when

What you do

Tell us what changed. If nothing changed, tell us that. Then pay your employee, and pay HMRC by the date we give you: usually the 22nd of the next tax month, or quarterly on a DPNI or DCNI.

What it costs

£157 a month per scheme for a DPNI or DCNI. An NI-only scheme is £157 a month for one employee, and £150 a month plus £7 per payslip for two or more. Setup is a one-off £750 per scheme, or £500 if you go ahead within two weeks of your quote. If your employee needs a Self Assessment return, that starts at £145, or £375 where split year or another complication applies.

Published, like everything else. See the full price list.

Tell us about your UK hire.

Which country you are in, and roughly when you want them paid. That is enough for us to tell you which scheme applies and what it will cost.

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