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The short answer
A Nigerian employer must operate UK PAYE only if it has a presence in the UK, such as a branch, agency or representative office; HMRC says an employee working from a private home does not create one. If it has none, a UK entity you work for may have to operate PAYE, or the employer can choose to run PAYE voluntarily. Otherwise HMRC's direct payment arrangement (a DPNI scheme) lets you, the employee, pay income tax and employee National Insurance to HMRC under your own PAYE reference.
Why this comes up
More Nigerians now move to the UK while keeping a job with a Nigerian company, or are hired by one after arriving. The employer pays in naira or dollars and has never dealt with HMRC. If you live in the UK and do the work here, UK income tax is generally due on that pay. Under Article 15 of the UK-Nigeria tax treaty, employment income is taxable in the country where you live unless the work is done in the other country, so work done in the UK is taxed in the UK. The question is who collects it.
Does the employer have to run UK PAYE?
HMRC's PAYE Manual (PAYE81610, updated 2 October 2026) says an overseas employer must operate PAYE if it has a presence in the UK, such as a branch, agency or representative office. Two points matter for remote workers:
- An employee working from their private home does not create a UK presence for the employer.
- Using UK professional services, such as an accountant, does not create one either.
So a Lagos company whose only link to the UK is you, working from your flat, will usually have no duty to run UK payroll. HMRC also notes two other routes: under section 689 of the Income Tax (Earnings and Pensions) Act 2003, a UK business for whom you actually work may have to operate PAYE if the real employer is outside it; and an overseas employer can operate PAYE voluntarily.
The direct payment (DPNI) route
Where nobody else runs PAYE, HMRC's PAYE Manual (PAYE20100) describes a DPNI scheme, used where income tax and primary (employee) National Insurance are due. It lists "a foreign employer who has no address in the United Kingdom from which earnings are paid" among the cases it covers. The employee pays both income tax and National Insurance to HMRC under one PAYE reference. Gravita, an accountancy firm, describes the practical side: the employee registers the scheme with HMRC, which it says can take up to two months, then calculates and reports tax and National Insurance each month, usually with payroll software, paying monthly or quarterly.
The details of setting one up are covered in the HMRC direct payment scheme, and National Insurance in NI when working for a Nigerian company.
Your options compared
| Route | Who does the work | When it fits |
|---|---|---|
| Employer runs UK PAYE | Nigerian employer or its payroll provider | It has a UK presence, or chooses to register voluntarily |
| UK entity runs PAYE (s.689) | The UK business you work for | You work for a UK business but are employed by the Nigerian company |
| DPNI scheme | You | No UK presence and no one else runs PAYE |
| Employer of record | A third-party UK payroll employer | The employer pays a provider to employ you in the UK |
What about Nigerian tax on the same salary?
If the Nigerian employer keeps deducting Nigerian PAYE as if you still lived in Lagos, you may end up taxed twice. Under the treaty, pay for work done in the UK by a UK resident is taxable in the UK. Tell the employer, in writing, when you became UK resident and where you do the work, and ask it to stop Nigerian deductions on UK-based work; recovery of tax already taken is a Nigerian matter. Your own Nigerian tax residence after moving is covered in Nigerian tax residence after moving to the UK.
Steps to take
- Ask the employer whether it has, or will set up, UK payroll.
- If not, ask whether it will pay for an employer of record or a payroll provider.
- If neither, contact HMRC about a direct payment scheme, allowing time for set-up.
- Keep payslips, the contract and bank records of each salary payment.
- Check your visa allows the work; see remote work for a Nigerian company on a UK visa.
Tax points here are information, not advice.
Agreeing the arrangement with the employer
Put the payroll position in writing: whether the employer will run UK PAYE, pay for an employer of record, or expects you to use a direct scheme; who bears any provider cost; and whether salary will be grossed up to cover employee National Insurance you pay yourself. Raising this before you move, or before you accept a UK-based role, is far easier than after a year of untaxed pay.
Where Pryme fits
If your salary arrives in naira or dollars, a Pryme account keeps it in that currency until you choose to Swap, so you can set aside the pounds you need for HMRC each month. The app shows the rate and the fee before you approve. Gravita notes that people on a DPNI scheme can struggle to prove income without standard payslips; Pryme statements, including verifiable ones through VerifyDoc.ai, are described on receipts and statements.
Questions people ask
Does my Nigerian employer have to pay UK PAYE for me?
Only if it has a UK presence, such as a branch, agency or representative office. HMRC says an employee working from home does not create one.
Who pays my UK tax if my employer is in Nigeria?
If no one runs PAYE, HMRC's DPNI scheme lets you pay income tax and employee National Insurance yourself under your own PAYE reference.
Can a Nigerian company run UK payroll voluntarily?
Yes. HMRC's manual notes an overseas employer can operate PAYE voluntarily.
Will I be taxed in Nigeria and the UK on the same salary?
Under the UK-Nigeria treaty, pay for work done in the UK by a UK resident is taxable in the UK. Ask the employer to stop Nigerian deductions on UK-based work.
Sources
- HMRC PAYE Manual PAYE81610: employer presence in the UK (updated 2 Oct 2026) · accessed Oct 2026
- HMRC PAYE Manual PAYE20100: DPNI scheme, direct payment of tax and NIC (updated 2 Oct 2026) · accessed Oct 2026
- Gravita: DPNI schemes explained (19 Feb 2025, modified 6 Oct 2025) · accessed Oct 2026
- UK-Nigeria Double Taxation Convention (1987), in force text · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.