Using PEO In The UK To Expand Business Internationally

This article forms part of a continuing series aimed at supporting businesses looking to develop into the global marketplace. In this article, we look at employing locally either through your own HR department or hiring a PEO provider. When it comes to employing in the UK, there are certain considerations that need to be taken into account. Even though the UK is ‘open’ as far as international business is concerned, there are several good reasons to leverage the many benefits that a PEO solution can provide.

The fact that the UK is the 5th largest economy in the world with a $2,629 billion GDP (IMF 2016) means that if you do not already have business interests in a UK PEO it really is time to look at the options. The UK’s relaxed approach to employee rights compared to mainland Europe is another plus when it comes to expanding internationally.

Employing in the UK

The first thing you will need when looking to employ someone in the UK is a legal entity. The most common form is the Incorporation of a Private Ltd or Limited company. Others include Partnerships, LLPs (Limited Liability Partnerships), and Sole Traders.
In addition, your company will have to be registered for payroll in compliance with UK law related to bookkeeping and accounting and may also need to register for VAT.
Depending on your company’s turnover, you may be required to open a UK Bank Account and hold Employer’s Liability Insurance.
You may need to set up an auto-enrolment-compliant Company Pension Scheme and carry out other requirements with Companies House.

If you make use of a PEO service for employing in the UK you can avoid carrying out all these complex and tedious tasks yourself and enjoy the luxury of leaving it all to the experts.

Employment Essentials

Whether you decide to incorporate your legal entity yourself or leverage the services of a PEO, there are certain essentials things that either you or your PEO partner will need to do:

– Once you have sourced an ideal candidate the first step is to get a job offer into their hands as quickly as possible before another company has the opportunity to snatch them up. Good candidates are hard to come by and usually don’t hang around long before another job offer comes along.
A job offer usually includes an offer letter, a personal specification, a detailed job description, and an actual contract for the candidate to consider. However, when it comes to making job offers the UK is fairly relaxed with no works councils to contend with and collective bargaining agreements rarely apply – except for public organisations.

This means that subject to statutory minimums, companies are free to offer any benefits they want such as salary, working hours, and holidays. One of these statutory minimums includes a 20-day holiday period plus all bank holidays to be granted to all employees in the UK. It should be noted that the minimum wage is £7.50 per hour in the UK (April 2017).
There are increasing rules that pertain to maternity/paternity leave and the requirement for employers to offer pension schemes to all employees is now mandatory in the UK.

When employing in the UK a bit of common sense will stand you in good stead. Particularly be careful not to discriminate in any way about anything! This specifically refers to things like age, race, sex, political views, religion, disability, etc., all of which are covered in various ways by case law and employment acts. Remember that this also includes the interview process and you should be careful not to ask a candidate anything that could be construed as gender-specific. It is best to stick to a list of pre-determined questions that are used for all candidates to avoid any repercussions.

Once you have your employees in place it is a simple matter of running a payroll, paying over tax to the UK tax authorities (HMRC), contributing to a pension provider, and managing all other benefits you may have agreed upon.
Remember to record all employee holidays and sick leave taken.
And don’t forget to put in place a robust expense policy and make sure that you reimburse employees regularly for company expenses.