Managing tax can be full of financial ups and downs, but our clients sleep well knowing they count for more with us. From managing corporate finances to addressing international personal tax needs, we take the stress away.
DPNI Scheme (Direct Payment National Insurance) Guide
Are you a UK employee working for an overseas employer? If your company doesn’t have a UK presence, you'll likely need a Direct Payment National Insurance (DPNI) scheme.
What is a DPNI Scheme?
A Direct Payment National Insurance (DPNI) scheme is a payroll arrangement where you, the employee, are responsible for deducting and paying both Income Tax and NI contributions directly to HMRC. This setup is necessary when your overseas employer does not have a UK entity and therefore cannot operate a PAYE scheme. Without this arrangement, you risk non-compliance and potential penalties from HMRC.
Understanding the complexities of a DPNI Scheme
With the rise of remote and flexible working, more individuals are finding themselves classified as UK tax residents while working for overseas employers. This shift brings additional payroll challenges, as the process of setting up a DPNI scheme is not always straightforward.
Several factors can impact its complexity, including where your employer is based, whether you earn additional income from UK or overseas sources, and your eligibility to pay National Insurance in the UK. HMRC requires confirmation that you are paying the correct amount of tax and NI, helping you avoid unexpected liabilities in the future.
In addition to tax compliance, there are practical payroll considerations, such as real-time information (RTI) submissions and auto-enrolment requirements, which must be handled correctly.
If you receive your salary in a foreign currency, you may also need to ensure your net pay is properly processed in GBP through a UK PAYE scheme. For those relocating to the UK for the first time, further tax implications—such as the remittance basis—may need to be assessed. Mark and Tom at Eastfield Accountants can guide you through the entire process, helping you determine eligibility, manage payroll obligations, and ensure full compliance with UK tax laws.
DPNI Scheme frequently asked questions
DPNI vs. DCNI – What’s the difference?
A DPNI Scheme requires you to handle both Income Tax and NI contributions. A DCNI Scheme (Direct Collection National Insurance) involves managing only the NI contributions. Choosing the appropriate scheme depends on the specifics of your employment situation.
Why do you need a DPNI Scheme?
If you are a UK tax resident working for an employer without a UK presence, HMRC requires you to handle your own payroll deductions. Without a DPNI scheme, you risk underpaying Income Tax and National Insurance, which could lead to fines or arrears. Setting up a DPNI scheme ensures you stay compliant with HMRC regulations, providing a structured and reliable way to manage your tax obligations.
How long does it take to set up a DPNI Scheme?
Setting up a DPNI scheme requires registering with HMRC by submitting your personal and employment details. The process can take up to two weeks, depending on HMRC’s processing times and the accuracy of your application. Ensuring all information is correct from the start can help avoid delays.
How does a DPNI Scheme work on an ongoing basis?
Once registered, we offer an administration service for the scheme on an ongoing basis. We will calculate and report your Income Tax and NI contributions to HMRC, usually on a monthly or quarterly basis.
Who pays for the DPNI Scheme?
As an employee, you are responsible for setting up, managing, and funding the scheme. This includes making the correct deductions, filing necessary reports, and ensuring timely payments.
Can overseas employers support me with the DPNI Scheme?
While some overseas employers may offer support, the ultimate responsibility remains with you, the individual.
How Can Eastfield Accountants help?
We provide bespoke tax services, including:
- Tax Compliance: Ensure your operations align with global tax laws to avoid fines and penalties.
- Cross-Border Tax Planning: Minimise liabilities through strategic planning and treaty utilisation.
- Double Taxation Relief: Avoid paying tax on the same income in different jurisdictions.
We handle all aspects of your international tax needs, saving you time and ensuring precision.
Here’s what our clients say!
Benefits of working With Eastfield Accountants
Partnering with Eastfield Accountants ensures you manage your tax obligations efficiently and stay compliant with UK regulations. Our expert advice helps reduce your tax liability, ensuring you only pay what is necessary. With our support, you gain peace of mind, knowing you’re fully compliant with international tax laws.
Start managing your tax situation with confidence
Contact Eastfield Accountants today for personalised advice on DPNI issues or speak with Mark or Tom about your circumstances.
Strategy, Tax
Related services
See below for other related services we provide to fully support your financial needs.
- Self Assessment Tax Returns
- Corporate Tax Planning
- Trust Tax Returns
- Capital Gains Tax Advice
- CIS Returns
- VAT Returns
- Company Formations
- Inheritance Tax & Estate Planning
- EIS and SEIS Tax Relief
- Capital Allowances
Tax
Self Assessment Tax Returns
Tax
Effortlessly navigate the self-assessment process with our reliable services. We ensure accurate submissions and maximise your tax savings. Trust us to handle your self-assessment tax returns, providing peace of mind and efficient compliance.
Strategy, Tax
Corporate Tax Planning
Strategy, Tax
Optimise your corporate tax position with our expert planning services. We provide tailored strategies to minimise tax liabilities, maximise deductions, and enhance overall tax efficiency for your business. Trust us to deliver comprehensive and effective corporate tax planning solutions, helping you achieve your financial goals.
Strategy, Tax
Trust Tax Returns
Strategy, Tax
Ensure compliance and accuracy with our comprehensive trust tax return services. We understand the unique tax requirements and regulations related to trusts and will handle your tax return preparation meticulously. Trust us to manage your trust tax returns with precision, allowing you to meet your obligations and maintain trust compliance efficiently. Focus on managing your trust while we take care of the tax compliance process.
Strategy, Tax
Capital Gains Tax Advice
Strategy, Tax
Obtain valuable insights and expert guidance on Capital Gains Tax (CGT) with our dedicated advisory services. We offer comprehensive assessments and tailored advice to help you minimise tax liabilities and maximise your returns. Trust us to provide reliable and approachable CGT advice, ensuring you make informed financial decisions for optimal outcomes.
Tax
CIS Returns
Tax
Streamline your Construction Industry Scheme (CIS) returns with our efficient services. We ensure accurate and timely submissions, helping you comply with regulations and avoid penalties. Trust us to handle your CIS returns with precision and ease, allowing you to focus on your core business operations.
Accounting, VAT
VAT Returns
Accounting, VAT
Navigate VAT compliance effortlessly with our comprehensive VAT return services. We ensure accurate VAT calculations, timely submissions, and compliance with HMRC regulations. Trust us to handle your VAT returns, minimising errors and optimising your VAT position.
Strategy
Company Formations
Strategy
Simplify the process of establishing your company with our professional company formations service. We will guide you through the intricacies of company formation, ensuring compliance with legal requirements and streamlining the administrative procedures. Trust us to handle the necessary documentation, registrations, and filings, allowing you to focus on building your business. Let us take the hassle out of company formations and set the foundation for your success.
Strategy, Tax
Inheritance Tax & Estate Planning
Strategy, Tax
Secure the future of your estate with our comprehensive inheritance tax and estate planning services. We offer expert guidance in structuring your assets, minimising inheritance tax liabilities, and creating a lasting legacy for your loved ones. Trust us to provide tailored solutions that ensure your estate planning goals are achieved while preserving your wealth for future generations.
Strategy, Tax
EIS and SEIS Tax Relief
Strategy, Tax
Harness the benefits of SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) with our expert guidance. We navigate the complexities of these tax-efficient investment schemes, helping you attract investors and maximise tax advantages. Trust us to optimise your SEIS and EIS opportunities, fuelling growth and innovation in your business.
Strategy, Tax
Capital Allowances
Strategy, Tax
Uncover the potential for substantial tax savings in your business with our specialised capital allowances services. We will conduct thorough assessments, identifying eligible assets and ensuring accurate claims to maximise your tax benefits. Trust us to provide efficient management of your capital allowances, helping you optimise your tax position while maintaining a friendly and approachable service.