Non-resident directors
A directorship is an office, so fees are usually employment income. When PAYE and NIC apply to overseas directors and how to handle UK visits.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityUsually yes for duties performed in the UK. A directorship is an office, so fees are employment income, and PAYE applies to earnings relating to UK duties even where the director lives abroad. Fees for duties performed wholly overseas are generally outside PAYE.
Apportioning duties
National Insurance and special arrangements
Usually yes for duties performed in the UK. A directorship is an office, so fees are employment income, and PAYE applies to earnings relating to UK duties even where the director lives abroad. Fees for duties performed wholly overseas are generally outside PAYE.
Where a director works partly in the UK, fees are apportioned on a just and reasonable basis, typically by workdays. Attending UK board meetings creates UK workdays, and HMRC expects those to be identified rather than ignored.
Records matter: a diary of UK visits, board meeting locations and time spent is the evidence that supports the apportionment. Without it, HMRC can treat the whole fee as UK taxable.
National Insurance depends on social security agreements rather than tax treaties. A director covered by their home system with an A1 or equivalent certificate is generally outside UK NIC; otherwise UK Class 1 can apply to UK earnings.
Short term business visitor arrangements and special PAYE arrangements for non-resident directors can reduce the administration where visits are limited, but they must be agreed with HMRC in advance.
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.
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Frequently asked
Often the cleaner route for a genuinely overseas director, but dividends need reserves and proper documentation, and cannot be dressed-up pay.
Director's fees articles in treaties often allow the state where the company is resident to tax them, so relief is usually by credit at home rather than exemption here.
Paying no director's fee is possible where the role is genuinely unremunerated and value is taken as dividends.
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No. This page explains general UK rules and common accounting treatment. Your facts, contracts and wider tax position must be reviewed before you rely on a conclusion.
Included approach
Check the current rules
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.
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