Employer of Record in the UK

Employer of Record (EOR) is a complete solution for recruiting local workers in the UK without making a financial commitment to a UK company. Each nation has a unique set of business laws that are distinct from those of other countries. It is a challenging environment, particularly for small- and medium-sized businesses that want to become worldwide. It can be challenging to set up offices in a foreign nation, like the UK, and to deal with all of the necessary legal and administrative procedures. The procedure may be made considerably simpler with the help of an Employer of Record UK solution of the highest calibre.

Our organisation provides you with access to several online tools that assist your business entity in hiring remote workers, managing difficult legal compliances, and doing administrative activities such as payroll, visa processing, and other things using an automated and high-tech solution. To learn more about the benefits of hiring us as your EOR in the UK, schedule a demo.

Overview of UK

• Population: 67.61 million
• Currency: Pound Sterling (£)
• Capital City: London
• Languages spoken: English
• GDP: 2.829 Trillion USD (2019)

Employment Landscape in the UK

The UK is one of the most alluring countries for individuals wishing to extend their enterprises internationally since it has one of the most developed global economies in the world. The UK benefits from having no language barriers because English is the primary language used here. The nation also has a respectable level of life, comes in fifth internationally in terms of total imports, and comes in tenth overall in terms of total exports. However, some employment obstacles, like those caused by Brexit, might be discouraging, particularly for small and medium-sized firms and startup organisations.

Finding the ideal candidates takes up valuable time for the majority of businesses wanting to hire workers in the UK. Typical hiring procedures including interviews, onboarding, obtaining permissions, receiving approvals for visas, etc., can take a lot of time, especially for company organisations that are not completely familiar with UK labour rules. Using the services of an Employer Of Record UK is a wise decision. By taking over all end-to-end employment-related procedures, such as payroll, taxation, visa, benefits, leaves, etc., an EOR established in the UK aids in the removal of outsourcing-related restrictions.

United Kingdom Labour law	It is required to have a comprehensive employment contract under UK labour law. Every aspect of the job conditions, such as compensation, working conditions, pay, and salaries, should be covered in the contract.
Statutory Working hours	A maximum of 40 hours spread over 5 days, with the option to split the time between Monday through Friday during the workweek. Employees may, however, deliberately opt to labour past these restrictions.
Overtime Eligibility	Only if their contract permits, employees may put in extra time. No one may be required to work more than 48 hours a week on average. Unless otherwise specified in the contract, companies typically do not pay overtime, as long as the employee’s average salary does not fall below the National Minimum Wage. The contract should specify that employees may be entitled to “Time off in lieu” of overtime labour.
Paid Public Holidays	There are eight public holidays in the UK: Good Friday Easter Monday Spring Bank Holiday Early May Bank Holiday Summer Bank Holiday Christmas Boxing Day New Year’s Day Employers are not required to provide these days off, though. Employers have the option of either including bank holidays in the required yearly leave package or not including them as part of paid vacations or holidays. Therefore, if an employee works on one of these eight public holidays, they are not entitled to overtime compensation.
Leaves	Sick Leave Employees earning a minimum of £120 per week are entitled to Statutory Sick Pay (SSP) of £96.35 per week, valid for up to 28 weeks. Employers can provide additional Sick Pay but cannot reduce the SSP. Employees do not contribute to Sick Pay. Maternity Leave New mothers are entitled to 52 weeks of statutory leave, with mandatory two weeks off after delivery. The leave consists of ordinary maternity leave (26 weeks) and additional maternity leave (26 weeks). Women working in factories must take four weeks off after delivery. Paternity Leave Fathers can take up to two weeks of paternity leave, which must be taken in one go. Holiday Entitlement/Annual Leave Full-time employees receive 5.6 weeks or 28 days of paid holiday annually, while part-time employees receive a pro-rata entitlement. Only eight days can be carried over to the subsequent year, and any unused leave is paid out at the end of flexible work
Compensation & Bonus	The hourly minimum wage ranges from £6.56 to £8.91. The age of the employee affects the pay. In addition, although it is not required, the Living Wage Foundation in the UK has established a better living wage for workers, and the majority of firms in the UK adhere to it. The UK wage structure does not require bonuses, and they are entirely up to the employer’s choice. Bonus payments are given to certain industrial sectors including engineering, R&D, science, public service, media, and technology. Bonuses are also frequently given to people in certain positions, like directors and senior managers.
Employee Health Coverage	In the UK, a type of tax known as National Insurance Contributions (NICs) is gathered to pay for employee health benefits. The contribution is made up of both employer and employee contributions. In addition to the federal scheme, employers can provide their employees with extra health benefits. Business organisations may provide their employees with supplemental health benefits at very low costs with the aid of the Employer Of Record UK solution.
Employee Protection and Anti-discrimination Rights	In terms of hiring, firing, compensation, benefits, training, redundancy, promotions, transfers, and employment terms and circumstances, this legislation provides protection from workplace discrimination. This legislation forbids employers from treating employees unfairly on the grounds of their marital status, age, gender identity or expression, pregnancy, handicap, race, colour, national origin, ethnicity, or sexual orientation.
Confidentiality of Personal Information	The Data Protection Act of 2018 safeguards personal information in the UK. The General Data Protection Regulations (GDPR) are put into effect in the UK by this Act. The legitimate and ethical use of personal data is governed by six data protection principles. The principles also stipulate that the data shall be utilised accurately, relevantly, and for a clear purpose. When no longer necessary, outdated data should be erased. Organisations must manage data securely to prevent loss and harm from unauthorised access.

Employment Laws in the UK

Employment Rights Act 1996	mentions an employee’s rights about termination and time off.
National Minimum Wages Act 1998	mentions the minimum wage, which the government routinely reviews.
Employment Relations Act 1999	establishes trade union recognition
Maternity and Parental Leaves etc. Regulations 1999	States maternity and paternity-related leaves
Part-time employees (Prevention of Less Favourable Treatment) Regulations 2000	UK firms need to treat their part-time employees equitably with full-timers.
The Equality Act 2010	Discusses discrimination at the workplace and during recruitment.
IR35	It is tax law that enables individuals to reduce taxes by working as disguised workers. Although they are paid by limited corporations, they work and behave like workers.

Contractors vs. Full-Time Employees

There is a difference between a contractor and a full-time employee in the UK. A full-time worker who is employed by an employer is entitled to a number of statutory benefits, including sick pay, maternity and paternity leave, notice periods, legal defence against wrongful termination, redundancy compensation, and requests for flexible work schedules. Contrarily, contractors may be self-employed, employed by an agency, or engaged on a project-by-project basis by a client. They have their own organisation, pay their taxes, and are not employed. To prevent fines and guarantee adherence to legal requirements, it’s critical to accurately categorise employees.

Consider recruiting full-time employees for long-term positions and contractors for temporary or seasonal positions when they are not involved in core business areas when making hiring decisions.

Recruitment in the UK

Many multinational corporations have historically decided to set up branch offices or subsidiaries in the UK in order to increase their workforce there. However, this can be a time-consuming procedure that could seriously impede your long-term ambitions and sharply raise your prices. Use UK job search engines or online recruiting businesses like Indeed, Reed, Monster, Glassdoor, CV-Library, WikiJob, Adzuna, LinkedIn, and more as an alternative. Due to the high calibre of talent they can offer, these platforms have recently gained greater credibility, but there are still disadvantages to take into account.

Utilising an Employer of Record UK service is a substitute strategy that is growing in favour. With this novel approach, you are able to engage full-time staff members and independent contractors on your behalf and assign them tasks in line with their employment contracts in the UK. Our cutting-edge software platform streamlines the recruiting process for both sorts of workers and gives you the information you need to decide on job offers. You may streamline your employment requirements in the UK with our company’s assistance and concentrate on your primary corporate objectives. Find out more about how we can assist you in achieving your objectives right away.

Probation & Termination

Probationary Period

Three months is the customary probationary term in the UK, especially if the relocation is internal. However, from the date of joining, the standard probationary term is six months. Please be aware that in the UK, probation is not governed by statute law.

Termination of Employment

The employment contract is terminated or ended when the employer does so. In the event of a termination, the employer is required to provide the employee with the greater of the statutory notice requirement or the amount specified in the contract. There are, however, some situations in which the worker may be let go immediately. According to the law, employers are required to provide the cause for your dismissal and the explanation for it within 14 days after requesting you to leave.

You may accomplish all of your aims for your worldwide expansion with the assistance of our experience and its strong global employment platform.

EOR Solution in the UK

Employer of Record (EOR) service is a wise choice for companies looking to grow their operations in the UK rapidly and effectively. With the help of our service, international businesses can quickly identify the top candidates for their team and employ them, while also providing a simple onboarding procedure for new hires. Businesses may save up to 85% on hiring and onboarding expenses by using our EOR solution.

Employment contracts, payroll processing, income tax management, statutory benefits integration, and general HR administration are all fully supported by our end-to-end system. With automated processes, digital signatures, employee payroll administration, contractor payout processing, and a variety of compliance solutions, our platform serves as a single employment gateway.

Businesses should be aware of our general terms of service before utilising our EOR solution. Foreign firms are exempt from the 7% GST tax that UK businesses must add to all invoices. Three months is the bare minimum for service, and we only take payments in British Pound Sterling.

We require particular information and documentation from UK nationals, including personal information, a copy of their passport, bank information, a copy of their NRIC (for permanent residents), and a job description, to guarantee a seamless and effective onboarding process. For overseas hires, we need additional paperwork including personal details, job descriptions, educational and technical credentials, CVs, copies of passports and IDs, bank account information, pictures, police check findings, and medical exam results.

Outsourcing employment through an EOR

When your company intends to grow its clientele in the UK, it is wise to weigh your alternatives and choose the best course of action after careful consideration. Building a subsidiary from the bottom up while handling all activities, from employing and managing payroll to identifying talent, can be a very time-consuming and challenging process. This is why employment outsourcing through an EOR might be useful. An EOR will oversee all aspects of the employee lifecycle, not just recruiting and payment. We can help you with the same thing and offer remote services so you can concentrate on your main company operations while our unified platform handles all aspects of an employee’s lifetime, from hiring to firing.

Types Of Visas in the UK

It is crucial for your company to have the proper staff if you want to grow, especially if you plan to expand to the UK. You have the option of hiring a reliable Employer Of Record UK to handle the visa application on your behalf or moving your internal employees to the UK.

The Points Based System (PBS) is the foundation of the UK work visa. Candidates must submit an application for one of the five levels of work visas. There are certain privileges, conditions, and admission criteria for each tier. Here are the several types of work visas available in the UK:

Tier 1	For business owners, investors, and workers with high levels of education outside the EEA and the EU.
Tier 2	for highly qualified workers from outside the EEA. Professional athletes are included in this category.
Tier 3	For low-skilled employees usually looking for temporary work outside the EU.
Tier 4	for non-EEA students who are 16 years old or older.
Tier 5	There are six tiers for temporary workers.

Work visa requirements in the UK

Depending on the tier type, there may be different procedures for getting work visas in the UK. All visas require sponsorship from an employer or sponsor. A completed application form, two coloured pictures, a current passport, documentation of housing and financial support, test results for tuberculosis, a trip itinerary, payment of the required visa costs, and the provision of biometric data are often required. Additionally, depending on the applicant’s region and desire, all submitted papers must be translated into either Welsh or English. It is crucial to thoroughly analyse the tier type’s unique requirements to make sure that all required evidence is submitted; otherwise, the application risks being turned down.

Work Permits

In order to work in the UK, non-EU citizens must get a work permit. A UK-based licensed corporate business organisation must sponsor the permit. Additionally required is a Certificate of Sponsorship from the UK government. The General Work Visa or the Tier 2 Visa is often the appropriate UK work permit for foreign nationals. Only Tier 1 candidates are eligible to submit an application for an unsecured UK work visa. According to UK legislation, a third-party organisation, such as an EOR, is not permitted to sponsor work visas. However, in order to get UK work permits as efficiently and in accordance with the UK immigration system as possible, our high-tech platform and knowledge can be of tremendous assistance.

Payroll & taxes in the UK

It is crucial to guarantee full compliance with the local rules on payroll & taxes in the UK, regardless of whether you recruit local British workers or move specialists from your nation. Managing all of these legalities may be a time-consuming and difficult process for foreigners, which is why it is beneficial to work with a local expert in payroll outsourcing in the UK.

Taxation in UK

Employee Taxation

The amount that the employee’s income exceeds their personal allowance determines how much income tax they will pay. In the UK, the regular Personal Allowance is $12,570. Employees who claim both the Blind Person’s Allowance and the Marriage Allowance will get a greater allowance. The Personal Allowance is smaller if the income is greater than £100,000 per year.

for a worker receiving a £12,570 basic stipend.

Employer Taxation

The Her Majesty’s Revenue and Customs (HMRC) PAYE system must be used by UK employers. The collection of national insurance and income tax is handled by this system. When paying workers, deductions must be made for things like salary, wages, bonuses, gratuities, maternity pay, statutory sick pay for PAYE, etc.

Tax	Explanation
Employer Taxation	Tax explanation contribution to Social Security 12% on weekly salary (GBP 183.01 to GBP 962)
Contribution to the social security system	13.8% on a weekly salary
Corporate Income Tax	19%

Employers who administer their own payroll must notify the HMRC of employee payments and deductions just before payroll. Employees must submit another report in the event of any reduced claims. All of this is handled on your behalf by a team of experts with an EOR solution.

Bonuses

Although it’s customary to give employees both cash and non-monetary incentives, it’s not required by law.

You must make sure that the subsidiary is formed in accordance with UK company formation regulations in order to establish a UK subsidiary for your firm. One choice is to establish a Sole Director subsidiary, which calls for supplying residence, service, and registered office addresses. The Companies House normally replies to confirm the subsidiary’s establishment in less than 24 hours. It is significant to remember that after incorporation, modifications to the subsidiary’s form are permitted and that the UK offers a variety of commercial options and organisational structures. If navigating these choices sounds difficult, working with an Employer of Record UK solution can help you satisfy your HR needs without setting up a subsidiary or holding company in the UK.