If you live in the UK and work remotely for a company overseas, you may be told: “Just invoice us and sort your own tax.” For many people that’s fine. But it can also create confusion, because HMRC does not decide your tax position based on the job title, the word “consultant” in a contract, or the fact you invoice. HMRC looks at how the working relationship works in real life.
This matters because some remote working arrangements are treated as employment for UK tax and National Insurance, even when the employer is abroad and does not run UK payroll. When that happens, DPNI may apply.
What DPNI is
DPNI is a PAYE Direct Payment arrangement. The simplest way to think about it is PAYE without a UK payroll.
Normally, an employer runs payroll, deducts PAYE tax and employee National Insurance, and you receive a payslip. With DPNI, there is no UK payroll doing that, so you pay HMRC directly under a PAYE reference instead.
When you should check whether DPNI applies
DPNI is worth checking when two things are true at the same time.
First, the job feels like employment in practice. For example, you work mainly for one organisation, you report into their structure, you have set availability, and you are paid regularly (often monthly).
Second, there is no UK payroll. You do not receive a UK payslip, and nothing is deducted for PAYE tax or employee National Insurance before you are paid.
Important point: an overseas company not running UK payroll does not automatically mean you areself-employed. It may simply mean they are not operating PAYE in the UK.
How HMRC decides if it looks like employment (simple real-life checks)
HMRC looks at the overall picture, not just the label in the contract. A useful way to sense-check your position is to look at the same practical areas HMRC focuses on in status guidance: control, personal service (substitution), equipment, financial risk, and how you are paid.
Control means who decides what you do, when you do it, and how the work is done. The more the engager controls the work in practice, the more it can point towards employment.
Personal service (substitution)means whether you must do the work yourself, or whether you have a genuine right to send a substitute and the client would accept it. If the work must be done personally, that can point towards employment.
Equipment means who provides the main tools and working set-up needed to do the job. Being provided with significant equipment and an office-style set-up can point towards employment.
Financial risk means whether you carry real business risk, such as quoting fixed fees, paying your own costs, or having to correct issues at your own expense. Risk and investment can supportself-employment.
How you are paid also matters. Regular salary-style pay (weekly or monthly) is more typical of employment, while being paid for defined jobs or deliverables with an opportunity to profit through efficient management can support self-employment.
If most of your answers sit on the “employment” side and there is no UK payroll deducting PAYE and employee National Insurance, that is the point where DPNI should be checked rather than assuming Self Assessment.
Quick self-check
If you are paid a fixed monthly amount, mainly work for one organisation long-term, have your work directed or reviewed day-to-day, have set availability for meetings or team work, must do the work personally, and receive no UK payslip or PAYE/NI deductions, it is worth checking your position properly rather than assuming Self Assessment.
If, instead, you genuinely operate like an independent business (you control how and when you deliver, you can take other clients freely, you invoice for defined deliverables, and you carry real business risk), Self Assessment is often the correct route and DPNI is usually not relevant.
How it works in real life(monthly vs quarterly)
Most people in this situation are paid monthly, so it makes sense to calculate and keep records monthly. DPNI payments to HMRC are often due quarterly, which is why many people follow a simple routine: keep everything updated each month, then pay HMRC on the scheme timetable.
How we can help
If you are unsure whether you should be treated as self-employed or whether DPNI may apply, we can review your contract and how the work actually runs day-to-day, explain the outcome in plain English, and confirm the correct route.
If DPNI is required, we can support HMRC registration and keep the process running with payroll-stylecompliance, including monthly calculations and submissions, and making sure payments are made on the scheme timetable.
To get started, contact us via info@schoolgateaccounts.co.uk or +44 7825 308400.
