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PAYE schemes under EC Regulation 883/2004

PAYE schemes under EC Regulation 883/2004

Tried to resurrect an old 2011 thread but the but the system doesn't seem to allow . Old thread was here:-

Concerns PAYE schemes under EC Regulation 883/2004.

Is it possible to set up just one scheme & account for both NI (e'e & e'rs) AND tax through the one scheme or are two separate schemes required. Client doesn't want to account for tax via Self Assessment & would prefer that it was under PAYE.

Also how do you actually register? We generally use one of the structured emails here:-

however these schemes don't fit well with any of the options.


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04th Mar 2014 10:55

I am not Sherlock/Morse/Lewis/Barnaby/Banks/Vera

... and I don't have time to trawl through your links trying to work out what it is that you want to know.

Tell us your circumstances and what you are trying to achieve and we might be able to give you an answer.

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04th Mar 2014 11:09

Er it's all in the question!

When setting up a PAYE scheme under EC Regulation 883/2004 (EU employer, no UK base, UK employee) in the old days the we used to set up a PAYE direct payment scheme which the EMPLOYEE would operate & account for PAYE & E'E's NIC (no ER's NIC).

Since 2010 the system has changed, hence the questions above.

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04th Mar 2014 12:04

I will work it out for myself, then

PAYE schemes are not set up under EC Regulation 883/2004 as such.  They are set up under UK PAYE Regulations in accordance with the summary which states:

"Determination of the applicable legislation

The insured person is subject to the legislation of a single Member State only. The Member State concerned is the one in which he or she pursues a gainful activity."

The amendment to 883/2004 which came into force in 2010 was EC Reg. 1231/2010 which extends EC Reg. 883/2004 to cover "nationals of third countries who are legally resident in the territory of the Member States by giving them a set of uniform rights which match as closely as possible those enjoyed by citizens of the Union."  It is therefore not relevant to a UK employee unless he is not a EU citizen, but if he isn't, EC Reg. 883/2004 is simply extended and the above rule continues to apply - a UK PAYE scheme is set up under UK PAYE requlations.

If "Is it possible to set up just one scheme & account for both NI (e'e & e'rs) AND tax through the one scheme ...?" is your question, the answer is Yes - it is called a DPNI PAYE scheme.

If "Also how do you actually register? We generally use one of the structured emails ..." is another question, the answer is call the Employers Helpline on 0300 200 3200 and ask them.



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04th Mar 2014 12:41

Hi Euan

Are you aware how you posts can come across?

Going to the link you to the DPNI PAYE scheme you have posted it actually says:-

From May 2010, EC Regulation 883/2004 introduced a change to the National Insurance Contributions responsibilities of employers based in other EC member states.Where an employee works in the UK for an employer based in another EC member state and NI liability arises, the liability will be for both primary and secondary contributions. In such a situation the employer is responsible for setting up (or arranging for a UK agent to set up) an NI only scheme rather than a DPNI scheme to pay the NI liability to HMRC.More information on how the tax element is collected can be found at PAYE20120.

Looking for practical advice here.

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04th Mar 2014 17:12

I can see your point

... but I wonder if this is another piece of incorrect "guidance" by HMRC.  It is not really plausible that anything in EC Reg. 883 in 2004 would only come into force in 2010 - hence, why I looked at the the amending EC Reg. 1231 in 2010, but that did not seem to contain any change about the foreign employer being liable to pay Er's NIC.

I can only repeat my earlier advice to call the Employer's Helpline, but now ask them to clarify whether a foreign employer with no presence in the UK is obliged to pay UK secondary Class 1 NIC and if so, why does their guidance specify a NI (only) PAYE scheme, rather than a DPNI scheme, when the UK employee is also liable to pay tax.  It is too much to hope for an explanation of where in EC Reg. 883/2004 it says that foreign employers must pay UK NIC, but only from 2010.

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