How to register as an employer with HMRC as a foreign company

Your first UK hire is signed, and payday is weeks away. Now one question matters most: do you register as an employer with HMRC, or do you hire another way? This guide explains setting up a PAYE scheme from abroad. It also explains when an employer of record is the smarter route.

How does a foreign company register as an employer with HMRC?

A foreign company registers as an employer with HMRC before its first UK payday. Registration cannot happen more than two months before you start paying staff. Once registered, you receive an employer PAYE reference number by letter.

The official steps are set out in the GOV.UK guide to registering as an employer. When you call, HMRC asks for your business structure, address, activities, contact details and planned pay dates. After that, HMRC sends a PAYE Online activation code, normally within 10 working days. Therefore, start early.

Do overseas employers always need a UK PAYE scheme?

Not always. An overseas employer must operate PAYE when it has a UK tax presence. Examples include a branch, agency or office. Without a presence, operating PAYE is voluntary. Even so, HMRC can make a UK business where the employee works responsible instead.

HMRC’s own PAYE manual on employer presence clarifies an important point. Staff working from home do not create a tax presence by themselves. Nevertheless, a UK office or representative office usually does. For this reason, PAYE registration for an overseas employer depends on your UK setup.

Setting up a PAYE scheme step by step

Setting up a PAYE scheme involves five practical steps. You confirm your UK tax position, register with HMRC, and receive your references. Then you choose payroll software and run payroll through Real Time Information (RTI). Plan the sequence before the employee starts.

1. Confirm whether your company has a UK tax presence.
2. Register as an employer with HMRC.
3. Receive your employer PAYE reference number and Accounts Office reference.
4. Set up HMRC-recognised payroll software.
5. Send a Full Payment Submission (FPS) on or before each payday.

If you pay staff before your reference arrives, run payroll anyway. Then store the FPS and send it late once registration is complete.

What is the employer PAYE reference number used for?

The employer PAYE reference number identifies your payroll scheme with HMRC. You use it on every RTI submission, on payslip records and on employee forms such as the P60.

For the 2026 to 2027 tax year, employers pay Class 1 National Insurance at 15% above £5,000 a year as per the Secondary Threshold. These figures appear in HMRC’s rates and thresholds for employers. As a result, the budget for this cost on top of gross salary.

What comes after PAYE registration as an overseas employer?

After setting up a PAYE scheme, you deduct tax and National Insurance. You also report every payday and pay HMRC on time. In addition, you enrol eligible staff into a workplace pension. Furthermore, UK employment law applies from day one.

• Pensions: automatic enrolment duties begin when your first employee starts. Our guide to NEST vs qualifying workplace pension schemes compares your options.
• Statutory pay: you administer sick, maternity and paternity pay.
• Right to work: you check every employee’s right to work before they start.

PAYE scheme or employer of record: which route fits?

A PAYE scheme suits companies building a permanent UK operation with in-house payroll skills. An employer of record (EOR) suits companies that want to hire quickly without that setup. With an EOR, the provider employs your UK staff and runs PAYE. Meanwhile, you direct the daily work.

Factor	Own PAYE scheme	Employer of record
HMRC registration	Your company registers	The EOR’s scheme is used
Time to first payroll	Weeks, depending on HMRC	Usually faster
Payroll and RTI reporting	Your responsibility	Handled by the EOR
Pension and statutory pay	Your responsibility	Handled by the EOR
Best for	Long-term UK growth	First hires and market testing

To compare both routes in numbers, try our EOR vs entity cost comparison.

Octagon: the structure behind compliant UK hiring

Borders, regulation and talent meet in every first UK hire. Since 1987, Octagon Professionals has given organisations the structure to operate across them with clarity, compliance and trust. Europol and OPCW rely on that expertise.

Our HR experts remove the risks that stall expansion. These include late RTI filings, missed pension duties, incorrect National Insurance and employment law breaches. You can register as an employer with HMRC yourself or hire through our employer of record. Either way, we carry the complexity. Meanwhile, you keep full control over salary, benefits and working arrangements.

Ready to hire in the UK with confidence? Talk to Octagon Professionals.

Frequently asked questions

Can a foreign company register as an employer with HMRC?

Yes. A company based outside the UK can register a PAYE scheme with HMRC. Registration must happen before the first UK payday, and no earlier than two months before staff are paid. HMRC then posts the employer reference.

How long does it take to get an employer PAYE reference number?

HMRC sends the employer PAYE reference number by letter after registration. The activation code for PAYE Online normally arrives within 10 working days. Timing can vary, so overseas companies should register early. If payday comes first, employers should still run payroll and file the submission late.

Does an overseas employer have to operate PAYE in the UK?

It depends on UK tax presence. A branch, agency or office in the UK usually means PAYE applies. Without a presence, operating PAYE is voluntary. However, HMRC can make a UK business where the employee works responsible for PAYE. Most foreign employers therefore register or use an employer of record.

Can I hire a UK employee without setting up a PAYE scheme?

Yes, through an employer of record. The provider becomes the legal employer and runs payroll under its own registered scheme. It also handles tax, National Insurance, pensions and statutory pay. Your company still manages daily work, and you avoid setting up UK payroll infrastructure yourself.

What do I need to register for PAYE as an overseas employer?

Prepare your company’s legal structure, registered address, business activities and contact details. HMRC also asks when you plan to pay employees. Available tax references help too. In addition, check your UK tax presence first. That position decides whether operating PAYE is mandatory or voluntary.