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Employing in United Kingdom

At a glance

Employment in United Kingdom

Foreign companies that employ workers in the UK face several challenges and must adhere to the legal and regulatory framework that is in place.  Most notably there are restrictions on employee activity depending on the type local entity they have incorporated. In some cases, using an outsourced employer will make the process smoother, and it is recommended to use professional legal services as well.  Our guide explains UK policies on leave, termination and payment of benefits.

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Payroll & Tax in United Kingdom

Complying with local payroll and tax requirements is essential for a company doing business in the UK.  Issues such as tax rates and withholding and social security are all essential in ensuring a seamless human resources operation.  Many companies will consider outsourcing these administrative tasks to a GEO (Global Employment Organization).

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Immigration / Work Permits in United Kingdom

Foreign workers are required to have the proper visas and work permits in the UK, as established by immigration laws.  This requires incorporation and licensing prior to sponsoring work permits for employees, which can be a problem if your company is trying to enter the country quickly.  The most common work permit is called a  Tier 2 visa.

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Incorporation

There are several business structures available for incorporation in the UK, and each has advantages and disadvantages.  In some cases it will depend upon the type of industry that you are in, and the scope of planned business activity.  Our guide has a comparison of the time and cost for incorporating standard company structures including Rep Office, Subsidiary Company and Branch Office.

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GEO Solutions or DIY Employment in United Kingdom?

Companies entering the UK must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities.  A GEO or United Kingdom Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a UK entity established that can run payroll.

A DIY approach will typically be delayed until there is a properly incorporated company ready to run payroll and can be a costly option if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Using Shield GEO Employer of Record Services in United Kingdom

Payroll United Kingdom
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Employees salary is processed through the UK PAYE system, with income tax, employees and employers national insurance deducted at source. Pay-roll is run once a month in the UK on the last Friday of the month.

 
Grossed income Tax Rate (%)
0 – 10,600 0
10,600 – 42,385 20
42,386 -150,000 40
150, 000+ 45
Tax Returns Supplied

Yes but generally not required.

Employers Social Security and statutory contributions

Employers National Insurance 13.8%

Employees Social Security and statutory contributions

Employees National Insurance 12%

Insurance requirements

Shield GEO’s UK partner will cover the employee under their PII, Public Liability and Employers Liability Insurance at no additional cost. Private Medical Insurance is not required in the UK but Shield can source this if you wish to offer this to your employees.

Corporate Income Tax Rate

20%

Payroll Tax

n/a

Sales Tax

VAT 20%

Withholding Tax

0%

Work Permits
Can Sponsor Work

Yes

Work Permit cost

£2000

Work Permit processing time

6-10 weeks

Can Work Permit be processed in country

Yes provided that the employee has an existing Tier 2 (General) Work Permit

Switch Business Visa to Work Permit?

No

Can Spouse work on dependent visa?

Yes

Business Visas
Can do Business Visa

No

Business Visa Cost

n/a

Business Visa processing time

n/a

Others
Can supply private health care

Yes

Can assist opening bank accounts

Yes

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