What is a DPNI PAYE scheme and how do corrections work?

A DPNI scheme deducts UK income tax and the employee's own National Insurance where the employer has no obligation to pay employer Class 1 NIC, typically because the employer is overseas with no UK presence. Corrections follow the normal FPS or EYU routes.

It is used where someone works for a foreign employer with no place of business in the UK, so there is no employer NIC liability, but the employee is still UK tax resident and liable to PAYE income tax on the earnings. The employee, or an agent acting for them, effectively runs a simplified scheme for their own tax.

It differs from a DCNI scheme, which handles direct payment of employee NIC alone, or a standard scheme, which includes full employer NIC. Getting the scheme type right at registration avoids HMRC expecting employer NIC that was never due.

Corrections work the same way as any RTI scheme: an amended FPS for the current year, or an Earlier Year Update once the year has closed, both submitted through payroll software configured for the DPNI reference. The scheme type itself does not change how corrections are filed.

Because DPNI cases are less common, HMRC's automated checks sometimes query figures that look unusual against a normal employer scheme, so keeping clear records of why no employer NIC was charged helps resolve any queries quickly.

Rates, thresholds and deadlines quoted here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.