Expanding Into the UK

September 10, 2024

English

Why Using an Employer of Record Makes Sense For Those Considering Expanding Into the UK

With a population of over 67 million, a stable & resilient  economy, and availability of a highly educated labor force, the UK is a preferred destination to do business. While all this sounds lucrative, setting up or expanding your business in the UK can be challenging. This is due to the intricate and complicated nature of employment laws, tax policies, and hiring rules in the country. Thankfully, you can work with the EOR to help you overcome such hurdles and operate smoothly.

This article will discuss the role of Employer of Record and why it is a smart choice for business owners considering expanding into the UK market.

employees meeting

What is an Employer of Record - Understanding the Basics

An Employer of Record is a third-party organization responsible for onboarding and offboarding staff in the UK on your behalf. It handles all the paperwork, completes legal formalities, and speeds up the business setup process in the UK.

Consider them your local talent acquisition entity that keeps you and your business on the right side of the law. From managing payrolls and taxes to drafting employment contracts that comply with UK labor laws, an EOR does it all!

This means that while you direct terelated activities of your employees, an EOR handles all the legal stuff related to employee management.

How can an EOR help ?

If you’re still not clear about the role of EOR, continue reading as we discuss several ways an EOR can benefit you and your business:

Ensuring Compliance 

In the UK there exists a robust employment framework coded into law, that governs all relationships between an employer and his employee, it is founded on the Employment Rights Act 1996, the Equality Act 2010 and numerous other regulations all designed to protect the rights of the employee and the interests of the employer.

An EOR guarantees that your employment practices do not go against the country’s laws. With a team of UK employment experts, an EOR helps you navigate the employment legislation related to workers’ rights, tax codes, payroll management, and termination without any hassle. This third-party entity keeps itself updated on the new regulations, ensuring your employment processes---from hiring to termination---are all in accordance with the laws.

Enter the Market Without Delays

Setting up a business in the UK is time-consuming and costly, taking months to complete. To avoid the hassle and speed up the process, you can partner with EOR to speed up the process. While working with an EOR you are not even required to register a local entity in UK.

Since the Employee of Record is a local body, it can quickly and efficiently hire local talent, all the while staying compliant with the UK laws, allowing your business to hit the ground running from day 1.

Manage Payroll and Taxation

As a foreigner, UK employment law requires you to use the Pay-as-you-Earn system to pay your employees, calculate taxes, and pay them directly to HMRC (His Majesty Revenue and Customs). To navigate these complexities, you’ll need a local third party, like an EOR, who understands the local payroll laws and taxation regulations.               

Moreover, you also need to generate itemized payslips that contain employment and compensation-related details and send them through mail or electronically.

Therefore, you’ll need an EOR that uses advanced payroll systems to disburse salary, pay taxes on time, and ensure all your processes comply with UK laws.

Get The HR Support You Desire

An EOR’s services go beyond compliance and payroll management. It also offers comprehensive HR support that includes drafting employee contracts, onboarding local talent, and managing employment benefits and day-to-day HR affairs.

 With expertise in the local market, the EOR ensures your employees receive the resources and support needed while aligning per UK law. With everything in place, you not only smoothen your business operations but also improve employee satisfaction and retention rate, leading to the overall success of your business in the UK market.

Pay Only For What’s Truly Needed

Setting up a business in the UK can be expensive! Do you know you can cut down office space and administration expenses with an EOR? With the extra cash in hand, you can allocate your finances to places they are most needed, such as paying your employees on time.

Not only that, an EOR also offers the flexibility of scaling your business---that means your team of local workforce grows with your business. The Employer of Record also handles the dismissal of services on your behalf and protects your business against the employee’s claims for unfair termination.

Whether an EOR onboards or offboards an employee or manages your payroll, you pay only for the services you require. This helps you avoid the overhead cost you may bear when partnering with local talent acquisition firms.

HR Support

Bottom Line

An Employer of Record (EOR) allows for a smooth and cost effective entry into the UK market with the ability to scale operations. The EOR like Swapp Agency takes care of all aspects of compliance and employment so you can begin hiring and start conducting business operations immediately without having to establish a legal entity.