How to employ an employee in a UK company | Law&Trust International

Hiring an employee in a UK company is not an easy procedure. The HR manager may not be adequately immersed in the UK labor legislation and know all the subtleties of the latest changes and requirements. Thus, employers resort to the services of law firms, which can completely take on a legal niche and significantly save the labor and time costs of the business owner.

Law and Trust International is rightfully considered to be one of the most successful companies that have gained a reputation in the international market, due to the high-quality and individual approach to clients in solving the most non-standard issues, including employment issues and interaction with tax, pension, and insurance bodies.

Below we will take a step-by-step look at the process of hiring an employee in a UK company.

Step 1. Registration as an employer

Before applying to various government services for registering a company as an employer, it is important to decide:

  • what type of employees are needed (worker, employee, self-employed and contractor, director, office holder);
  • what type of employment (full time or part-time; main place of work or by-job);
  • what salary will be paid to the employee (the amount of taxes that will need to be paid depends on the amount of the salary).

After that, you can apply for registration as an employer in the tax service of England (HM Revenue and Customs) with the obligation to register with the Pension Fund (Pensions Regulator) and receive Employers’ Liability (EL) insurance.

Step 2. Employee registration

You can only hire an employee in a UK company and officially pay wages to employees who reside legally in the UK and have National Insurance contributions. Otherwise, the company will not be able to pay tax for an employee who does not have a National Insurance Number. If it is necessary to employ a non-resident in the UK, then the company must obtain a sponsorship license.

The employer must necessarily conclude an employment contract with the employee, where the rights and obligations of the two parties will be prescribed.

The final step will be the registration of an employee in the tax service of England (HM Revenue and Customs) with the obligation to register with the Pension Fund (Pensions Regulator). The employer must mandatory notify the public services of a new employee in his company.

Step 3. Filing tax returns and paying tax

After the employee is hired by a UK company, the employer will be required to file monthly tax returns and pay taxes to the English tax office (HM Revenue and Customs) and contributions to the Pensions Fund (Pensions Regulator). If the employee's salary exceeds £ 166 per week, insurance premiums will have to be paid.

If for any reason, earnings were not paid to the employee in the tax period (per month), it is mandatory to notify the tax service of England (HM Revenue and Customs).

It is important to remember: the tax period begins on the 6th day of the current month and lasts until the 5th day of the next month. If the employer has not sent a monthly declaration or has sent it late, a penalty will be charged, unless a weighty reason for the delay in reporting is indicated.

For legal and tax advice regarding employment with a UK company, please contact Law and Trust International. You can familiarize yourself with our services in more detail on our website:


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