Payroll and HR in the United Kingdom

Local Information

Local Time (LIVE):4:19 PM
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Business Language(s):English
Tax Year Dates:6th April – 5th April

 

According to the UK government, more businesses locate their EU business headquarters in the UK more than anywhere else in Europe. That’s unsurprising, with the UK predicted to become the largest economy in Europe by 2030 and its myriad of opportunities in different industries. There’s also the benefit of low corporate tax – 20%, the joint lowest in the G20.

Despite the UK’s many benefits for business expansion, new staff payroll, immigration and other aspects of international payroll and HR can be stressful to manage and organize. Luckily, FMP Global’s in-country teams have the expertise to help with the payroll and HR logistics of expanding your business.

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Employer Must-Dos

In the UK, the following reports must be submitted to strict deadlines

  • VAT Returns
  • Company Tax Returns
  • E.O.Y Reports
  • Employee Payment Summaries

Payroll in the UK

What tax considerations are there?

Everyone in the UK is subject to the same tax rate, no matter their residency status. However, a UK resident will be taxed on their worldwide income, whereas a non-UK resident will be taxed only on income earned in the UK. Businesses are subject to corporate tax (as mentioned above), VAT and potentially, Stamp Duty. Employees will need to pay income tax as well as National Insurance contributions (for benefits such as the NHS).

Autoenrolment

In the UK, employers have a duty to help employees save for retirement, abiding by the UK’s workplace pensions law. Businesses of all sizes are required to offer a workplace pension, and will need to undertake a number of processes to ensure complete compliance with the country’s legal requirements, considering implementation of schemes, assessment, communications and payments.

The minimum contribution rates currently stand at 5% (at least 2% paid by the employer), however this is set to rise next year to 8% (3% minimum contribution paid by employer).

Expenses and Benefits

Employers that provide expenses or benefits to employees may need to be declared to HM Revenue and Customs (HMRC) to pay tax and National Insurance on them.

Other Considerations

The National Minimum Wages in the UK are as follows: £4.20 for under 18s, £5.90 for 18-90, £7.38 for 21-24 and £7.83 for 25+ (the National Living Wage).

With holiday pay, UK employees are entitled to a minimum of 5.6 weeks paid annual leave (28 days for an employee working 5 days a week). This is divided between 20 holiday days and bank holidays.

HR in the UK

What are the regular working hours in the UK?

The maximum working hours in the UK are 48 hours (unless opted out). The typical full time working hours are around 40 hours a week, Monday to Friday, 9am to 5pm/5.30pm.

Employment Rights

Employees are entitled to a range of statutory employment rights in the UK, including rights such as the right to a written statement of terms, statutory minimum payments in the event of illness and forms of family-related leave. It also includes rights on termination.

Permission to work & Visas

Most foreign nationals coming to work in the UK (aside from countries in the European Economic Area) are required to apply for prior approval to work in the UK. This is in accordance with the UK’s Points-Based System for immigration (PBS).

Termination

Employees must be given at least the notice stated in their contract, unless they have been dismissed immediately. Employees can be dismissed immediately according to rights stated on the gov.uk website. These include the employee not being able to do their job properly or having a long-term illness that prevents them from doing their job.

Get more Information on International Payroll

Find out more about international payroll and the implications and considerations that come along with it, download our free guide to international payroll today.

Download Our Guide

FMP’s UK Payroll and HR Solutions

FMP Global are the international payroll and HR partners you’ve been searching for. Whether you’re looking for payroll and hr support in London, Edinburgh or Belfast, our in country team will help. Our priority is always ensuring your business remains compliant in line with the country’s legislation, so you can get on with the day-to-day. Our services include:

  • UK Employment Contracts
  • Payroll Processing
  • Handling of payments (salaries)
  • Annual declarations (lodging, apprenticeship & training taxes for concerned companies)
  • Relations with social bodies
  • Regulatory Compliance
  • Tax and Labor Law Consulting
  • Assisting in payroll audit (or payroll department audit)
  • Handling of confidential payroll
  • Assistance in company restructuring plan
  • Assistance in implementation of procedures
  • Assistance with start-up (in link with lawyers)

Stay Compliant - Payroll and HR Services in the UK

FMP Global’s international payroll and HR professionals are ready to help. We’ll help coordinate and manage your global payroll and HR.

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