PEO & Employer Of Record United Kingdom
Infotree Global Solutions assists clients to hire in the United Kingdom by providing Employer of Record solutions. For companies willing to recruit staff and manage payroll in UK without having a subsidiary, Infotree Global Solutions is a wise option. Here the employee is legally contracted through our subsidiary in accordance with the UK labor law, which is a streamlined way to recruit employees in the UK. With quick employee onboarding, you enter the international market without facing legal complexities. Our in-territory experts provide you all the required expansion assistance that helps you execute payroll management seamlessly.
Setting up a business or employing in the United Kingdom – Here is the detailed information that throws light on the various aspects of hiring in the United Kingdom.
Table of Contents
• Hiring in United Kingdom
• Setting up Payroll in UK
• Payroll and Tax in UK
• Employee Entitlements
• Setting up a Subsidiary in UK
• UK Employment Compliance
• UK Visas and Work Permits
• Benefits of UK Hiring Outsourcing
• Why Infotree Global Solutions?
Hiring in United Kingdom
U.K. labor law includes different acts, charters, and regulations. The wide array of legislation requires a great legal framework for staff, employers, and trade unions. There are specific rules governing the rights and responsibilities. Due to the complexity of employment laws in the U.K, drafting accurate employment contracts comes as a mandate. Hence, the role of your employer of record United Kingdom and PEO is vital. It helps you ensure that every contract meets all the specified requirements. Besides, it assists you with the familiarity with cultural norms and best practices of hiring in compliance with the country labor laws
Setting up Payroll in UK
When it comes to setting up payroll in UK, having an employment contract comes as a legal requirement in United Kingdom. It should have all the details of the employee’s responsibilities, compensation, perks, grievance and disciplinary procedures, and even termination requirements if required. An offer letter in the UK should always have the salary and compensation amounts listed in British pounds instead of a foreign currency. The legal needs for an employment deal in the UK are basic and most of such contracts are more comprehensive in nature than the law demands. The provision of such an employment contract should be done as per the recommendations of an Employer of Record UK. The pound (£) is the legal currency here.
There are different requirements to set up payroll including:
- Personal details including full name, gender, address and date of birth etc.
- National Insurance number
- Student Loan (if applicable)
- Tax Code (if applicable)
Employers should update HM Revenue and Customs (HMRC) while onboarding a new employee. For new employee registration with HMRC, the employer must include their information on an FPS or a Full Payment Submission the first time they get their salary.
The FPS comprises of:
- The information gained from the employee (from the employee’s P45, or ‘starter checklist‘)
- Tax code as well as starter declaration
- Pay and deductions (like tax deductions, student loan, and National Insurance deductions) from the time when they join the current company
Social Security Registration
Every employer managing a Pay-As-You-Earn (PAYE) Scheme is given an ‘Employer PAYE Reference’ (ERN). This is known as the reference number for the income tax as well as the National Insurance contributions of their staff.
Payroll and Tax in United Kingdom
Employers are required to deduct Personal Income Tax as well as a National Insurance contribution from business earnings through a system called PAYE (Pay as You Earn). The payroll requirements include sending the year’s final report before the employee’s payday and update all the payroll records, payroll software, and providing the employee a P60, and reporting employee expenses and advantages. Employees can put to work up to 48 hours per week which comes with an opt-out option and they can further work extra hours. Exceptions to these rules can be further employed depending on the employers. At Infotree Global, our UK Employer of Record Services help you understand the various aspects of it like employer contributions comprised of National Insurance, Workplace Pension, Employee taxes, personal allowances up with a basic rate and higher rate and so on. While setting payroll in the UK one should be aware that the corporate tax rate is 20%, while individual income tax varies between 20% to 45% depending upon employee gross earnings. Employers contribute around 13.8% towards National insurance Contribution and employees contribute 12%.
According to United Kingdom’s National Minimum Wage, the compensation of an employee varies depending upon one’s age and other factors. Usually, there is a probation period of three to six months. Employers can decide on the contractual benefits including bonuses for their employees. As an Employer of Record, Infotree Global assists you with employee entitlements as per the UK regulations. If an employer considers distributing cash or non-cash among his employees, it must be reported to HM Revenue & Customs (HMRC) and the reporting requirements may vary further. Employee termination in the UK recommends employers to give staff between one and 12 weeks’ notice before ending their services. Employers must offer statutory redundancy pay, and payment through the notice period or instead of notice based on individual circumstances. An employee with a tenure of two years or more with the employer has the right to a statutory redundancy payment (SRP). As an Employer of Record UK, Infotree Global assists you with employee entitlements as per the UK regulations.
Setting up a Subsidiary in United Kingdom
If you want to establish a legal entity in the United Kingdom, it is recommended to hire an Employer of record. You need to find out all the requirements and queries that can help you gain the best advantage of their professional acumen. There are legal issues, compliance hassles, and laws & regulations in the UK which need serious consideration. Overseas business seeking to register in the United Kingdom need to register themselves as an employer with Her Majesty’s Revenue and Customs (HMRC).
To set up a UK limited company even if you are not resident here is possible. However, it will be required to provide a UK address, to be used as a registered office. It should be a service address where any statutory mail can be acknowledged by company directors or shared with their overseas location.
The process requires the following information:
• A unique company name
• A UK address
• The full name, date of birth, address, and nationality
You also need to open a UK bank account which is based on the internal policy of the bank. A general requirement includes directors’ presence to sign the original mandate.
Once your company has been incorporated by Infotree Global, you get a full legalization service with our professional help and the UK foreign office. As an employer of record, we oversee all risk mitigation, compliance, and payroll management so that you can enter the market with confidence. No matter whether it is a short-term project or a well-chalked-out long-term plan, hiring a team needs an employer of record services in UK to make it easier. By taking our assistance, you get the agile and flexible solution that can save a significant amount of money spending on the entity establishment.
United Kingdom Employment Compliance
Each employee in the UK should be given a detailed employment contract in the English language. An EOR in United Kingdom helps you with the non-confidentiality and post-termination restrictions clauses providing greater protection for any venture. There should be a complete insight into the UK legal requirements like sick leave, holiday entitlement, and maternity or paternity pay that should be made available prior to the offer. An Employer of Record recommends where the provisions can be improved to offer a competitive salary and perks for all employees.
UK Visas and Work Permits
The eligibility for a UK work visa is mainly determined by various points that you are able to score on the UK points system. These points are awarded for qualifications, expected income, language skills, and sponsorship. Before any individual applies for work permits, he needs to fulfill a number of basic work permit requirements. The employee should have a confirmed offer of employment from his employer or an Employer of Record who will be acting as his sponsor having a certificate of sponsorship. Besides, he should clarify the points-based assessment that can be found on the category-oriented work permit. The work permit application process is led by the employer who issues a certificate of sponsorship.
Taking assistance from Infotree Global’s UK Employer of Record helps you sail through the complex process and ensures that you get all the required documents without hassles.
Types of Work Visa
• Tier One: Highly skilled workers, investors, and entrepreneurs can apply for this type of visa. Even graduate students residing outside the European Union (EU) and EEA are also eligible without having a job offer.
• Tier Two: To retain its competitive edge, the UK encourages skilled people to work in the country with a Tie 2 visa program. The workers with their occupations like professional sportsperson, clergy members outside the EEA can go for it.
• Tier Three: Initially, these were meant for low-skilled workers who are engaged in providing temporary labor. However, the government now does not consider immigrants from outside the EU for the positions and have eliminated these visas.
• Tier Four: Students above 16 years from outside the EEA can apply for it. It is meant for those who want to pursue study at school, college, or university in the U.K.
• Tier Five: It further has six sub-tiers of temporary workers that are associated with creative and sporting positions, religious workers, charity, and young individuals willing to work in the UK on working holidays.
Benefits of UK Hiring Outsourcing
As businesses are becoming more specialized, globalization is significant. With the world developing new rules, laws are also evolving consistently. There is a constant update in rules and regulations which is adding to the complexities. Especially if you are a new company, trying your luck in the overseas market, these challenges are intimidating. By taking the employer of record UK services, you get a number of benefits associating with overseas hiring. A business that engages an Employer of Record gets benefitted in terms of mitigating risk, cost, and complexities related to overseas expansion. By outsourcing for hiring in UK, your employee gets the same perks and security as other staff members of your company.
Why Infotree Global Solutions?
As your UK Employer of Record expert, Infotree Global Solutions takes the responsibility for adhering to the laws and regulations of the United Kingdom. We take tax, HR, and social security burdens away from you and ensure to get your employee onboard with ease and in less time. We allow you to utilize the potential of our network offices to actively work on your company’s behalf and take care of all the legal considerations and compliances. You simply enjoy peace of mind learning that our staff of in-territory experts will be there for you throughout your expansion plan in the UK. We help you expand into emerging markets, provide a dedicated workforce for your business in a compliant way. We do ensure to practice legal, HR & payroll compliance in the country that you are going to establish your business.
So, if you wish to reduce the cost of a traditional setup and reduces the hassles of processing and managing the back office, reach us to learn about our Employer of Record services in UK!