Cross-Border Business

Do non-resident directors of UK companies pay UK tax?

Answered by Jordan Onraet-Wells, Founder & Chartered Tax Adviser (CTA). Published 28 July 2026. Last reviewed 28 July 2026.

The short answer

Yes, usually. Fees for the duties of a UK directorship are UK-source employment income, so a non-resident director generally pays UK income tax on them and the company must operate PAYE, even if the director never sets foot in the UK. Dividends are treated very differently: they carry no UK withholding tax, and the disregarded income rules can cap or remove UK tax on them. National Insurance follows separate social security rules and is often not due at all.

There is no UK residence requirement for directors; you can hold the role of UK company director from anywhere in the world.
HMRC treats UK directorship duties as performed where the company is, so the fees are taxable in the UK even if you rarely visit.
Pay for genuinely separate duties performed abroad can usually be apportioned out, handled since 6 April 2025 through a section 690 notification to HMRC.
An HMRC concession keeps board-meeting-only directors outside UK National Insurance: no more than 10 UK board meetings a tax year of up to 2 nights each, or one meeting on a visit of up to 2 weeks.
Your country of residence will usually tax the same fees and dividends under its own rules, so the UK answer is only half the picture.

Why director fees are taxed in the UK

A non-resident employee is normally taxed in the UK only on duties physically carried out here. Director fees sit outside that comfort zone: HMRC regards the duties of a UK directorship as performed where the company is, so the fees are UK-source wherever you do the work, backed by most UK double tax treaties. PAYE is the company's obligation and applies even though you live abroad. Earnings for genuinely separate duties performed overseas can usually be time-apportioned by days worked in and out of the UK, with PAYE run only on the expected UK slice under a section 690 notification. Most non-resident directors also file a UK Self Assessment return; British citizens, EEA nationals and residents of many treaty countries can still claim the £12,570 personal allowance. The detail is in our non-resident director guide.

National Insurance and dividends follow different rules

National Insurance follows social security rules, not income tax rules, so you can owe UK income tax with no UK NIC. A certificate of coverage under a social security agreement usually keeps you contributing in one country only. Where no agreement applies, HMRC's concession means no UK NIC arises if your only UK work is board attendance and you stay within the limits above. Dividends are gentler still: UK companies pay them with no withholding tax, and under the disregarded income rules a non-resident's UK tax on dividends can be capped or reduced to nil, though claiming the cap means giving up the personal allowance against your other UK income, so the two outcomes have to be compared.

The other country matters as much as the UK

Your home country will usually tax the same fees and dividends under its own rules, with double tax relief rather than exemption the typical result, so the salary versus dividend mix is a two-country calculation. Where the board actually takes its decisions can also affect the company's own tax residence. See running a UK company from abroad before settling the structure.

Go deeper

Sources and further reading

This is general information for the 2026/27 UK tax year, not personal tax advice; speak to a Chartered Tax Adviser about your own position.

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