The UK labour market has an international reputation for being flexible and employer-friendly, particularly in comparison with its European peers. However, there are a number of laws, customs and idiosyncrasies that it’s important to be aware of if you’re setting up in the country for the very first time. In this guide, we’ve outlined a few things that you should be aware of when you’re recruiting in the UK.
Meeting tax obligations for your employees
Unlike some other countries, most UK employees don’t have much responsibility for their own tax affairs. Instead, their employer deducts tax and some other items from their salary before it is paid for them. This will require you as their employer to work with HMRC to ensure that the correct amounts are paid and that you remit these sums to them on a regular basis. You’ll then have to give your employees a P60 form, which is an annual summary of the amount of tax that you have paid on their behalf.
Tax can be a complex business in the UK. VAT obligations vary significantly depending on your sector and the particular arrangement you have with HMRC. If you aren’t confident, it’s well worth getting an expert to look at your setup to make sure that you don’t get caught out.
Minimum wage legislation
The UK minimum wage is split into a number of bands depending on whether an employee is an apprentice and how old they are. That means that the wage ranges from £3.50 an hour for an apprentice to £7.50 an hour for an employee aged 25 or over (known as the National Living Wage). The government has begun naming and shaming companies who do not comply with minimum wage legislation, so it’s vital that you get this right. Make sure you’re aware of what counts towards hours worked. You may be required to pay employees when they’re travelling between assignments for instance.
As with any country, the UK has a number of rules and customs that make it different from other markets. Trying to apply a model that has worked elsewhere to your UK operations could easily get you into trouble. Before you recruit your first UK employee, please ensure that you’re up to speed with your obligations. Check out our HR service offering here and get in touch with Goodwille today for further guidance.