Class 1 NIC only Direct Collection (DCNI) scheme is an HMRC payroll arrangement is where an employee, rather than an employer, pays only their Primary Class 1 National Insurance contributions directly to HMRC. This is typically used when working for a foreign employer with no UK business presence, specifically when only NI is due.
Key Aspects of DCNI (Direct Collection - National Insurance Only)
- Who it is for: Employees working in the UK for foreign employers (like embassies, consulates, or foreign companies without a UK base).
- Purpose: Since the foreign employer has no UK legal obligation to operate payroll, the employee takes responsibility for paying their own NICs.
- Scope: This specific scheme covers only National Insurance, not PAYE Income Tax. If income tax is also due, a DPNI (Direct Payment National Insurance) scheme is used instead.
- Collection: HMRC typically collects this through a direct arrangement, often managed quarterly, rather than standard monthly RTI submissions.
- Difference from DPNI: DPNI covers both Tax and NICs; DCNI covers National Insurance only.
For more information, you can review HMRC's guidance on DCNI scheme setups.
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