UK Tax on Foreign Employment

UK residents who act as a representative for a foreign employer—meeting clients, making introductions or otherwise carrying out duties in the UK—must operate a UK payroll. Even though your employer is based abroad, HMRC treats you as an employer in the UK. 

You must register your employer with PAYE Online (DPNI scheme) and choose payroll software that calculates and reports Income Tax and National Insurance contributions (NICs) on every payday. You will calculate Class 1 employee and employers NICs on earnings above the secondary threshold (currently £175 per week). Each pay period, you submit a Full Payment Submission (FPS) to HMRC, showing pay, tax and NICs due. You then pay the collected sums to HMRC by the 22nd of the following month.

For UK residents with foreign employment but no UK-based clients or customers—such as those fully paid by overseas companies—their salary remains taxable in the UK under the worldwide basis of assessment. You declare your foreign salary, bonuses and allowances on a Self Assessment tax return. Tax treaties and the “183-day rule” may reduce UK liability: if you spend fewer than 183 days in a foreign country and your employer does not bear the cost of your UK presence, you might escape foreign tax and pay only in the UK.

Conversely, if you spend more than 183 days abroad, you could become a non-resident for UK purposes, meaning you pay UK tax only on UK-sourced income. In all cases, you claim double taxation relief by showing foreign tax paid and the treaty method—deduction or credit—on your Self-assessment. 

Keep detailed records of overseas days, pay slips, and foreign tax certificates to avoid unexpected liabilities. Understanding employer PAYE duties and residence rules helps UK-domiciled individuals ensure accurate reporting and payment of tax and National Insurance Contributions (NICs).