If you have no employer in the UK or business treated as your employer, you will be responsible for paying your own employee Class 1 National Insurance, through a Direct Payment Scheme, to HMRC.
Tax presence (of your employer) is not statutorily defined, but is developed as a concept by case law. HMRC regards ***** ***** or agency in the UK, or a UK representative office, as establishing a tax presence. For there to be a tax presence, HMRC need to show there is something in the UK similar to a branch or agency, office or establishment. HMRC would not regard an overseas employer as having a tax presence in the UK simply because there are employees in the UK.
Because you have to operate your own PAYE or National Insurance you would normally contact your local HMRC office to set up a Direct Payment scheme. When you register with HMRC for a Direct Payment scheme you will be issued with a pack containing the forms you need.
A DPNI scheme type is appropriate where the normal PAYE procedures are unsuitable. The employee is responsible for the deduction of his or her own Income Tax and employees share of National Insurance contributions.
You can submit self-assessment tax returns, paying income tax over in the normal way on an instalment basis twice a year – HMRC could impose a requirement to operate a ‘direct payment PAYE scheme’ which obligates you (not the employer) to account for and report PAYE as normal. HMRC tend to allow the self-assessment route if you are not capable of operating the scheme yourself (this would tends to be the majority of cases).
Register for self assessment
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