Employer of Record United Kingdom

Employee is employed by you and paid by you from your overseas Company

Pros: Seems like it would be the cheapest and easiest option.

Cons: You will be unable to pay the the legally required social security contributions. Employer-employee relationship will be governed under UK law.

Using an EOR

Pros: For teams under 15 employees, using an Employer of Record in UK is the most cost-effective solution for managing payroll, HR, and compliance, compared to setting up a separate legal entity.

Cons: While Employers of Record shine for small teams, costs rise with larger teams (over 15 employees). Choosing the right UK Employer of Record provider can also be challenging.

Entity Set-up

Pros:  This may be the most cost effective option for large numbers of employees (circa 15+).

Cons: For businesses with less than 15 employees, the cost and time involved in setting up a legal entity and complying with employment and tax laws can be prohibitive.

Hire a contractor in UK

Pros: Ideal for flexible work – workers can have multiple clients and send substitutes, making it an easy and affordable option.

Cons: Beware! Using contractors as full-time employees for one company is illegal (misclassification) in the UK and has serious consequences, including fines and even criminal charges.

Yes, but only if they’re not acting as a full-time employee for your company. Contractors can work for multiple companies, control their work methods, and send substitutes.

If a company dictates what the worker does and who they can work for, classifying them as anything other than an employee could violate UK employment law.

Misclassifying a worker in the UK could lead to fines, back pay for holidays, social security contributions, setting up a UK business presence, and even a lawsuit from the employee.

While setting up in the UK is relatively straightforward, need a registered office for tax purposes, along with payroll software to manage employee payments and submit them to the UK tax authorities. You must also comply with all UK employments laws which are often complex, and failure to do so could lead to unlimited fines.

When you hire in UK, it comes with specific legal responsibilities. HR compliance ensures your company follows the rules and regulations governing employment practices, protecting both your business and your employees.

By adhering to employment laws, you’re not just ticking boxes, you’re protecting both your employees and your business. Compliance ensures fair treatment for your workforce, covering aspects like sick leave, vacation time, minimum wage, and appropriate working hours. This not only fosters a positive work environment but also minimizes your risk of facing legal repercussions like fines, penalties, and even lawsuits.

With Agility EOR as your Employer of Record United Kingdom, we seamlessly handle all employee tax and social insurance filings and payments, ensuring complete compliance so you can focus on running your business.

Agility EOR takes care of your HR compliance workload. Here’s how:

Expert Guidance: We’re based in the UK and we’re CIPD qualified (UK HR body). What we don’t know about UK employment law isn’t worth knowing.

Stay-Ahead Knowledge: Our team stays up-to-date on complex HR topics, including payroll, social security, data privacy, notice periods, and remote work regulations.

Fast Action: Our team promptly addresses any queries or issues that may arise.

While Agility EOR manages UK employment law and compliance, your company remains responsible for day-to-day management and direct communication with your team, including addressing performance concerns and disciplinary actions.

Put simply, Agility EOR handles the legal side, while you manage your team and their daily tasks.

Both employers and employees contribute to the social and tax system in the UK.

Employers: Employers National Insurance

Employees: Income tax, National Insurance.

Employer of Record hired employees in the UK enjoy full legal protection, with compliant local contracts, statutory benefits (maternity leave, annual leave, sickness pay), tax credits, and public healthcare access through the NHS.