UNITED KINGDOM GUIDE

EMPLOY IN UK WITH EASE

  • Access and hire global talent & deploy them anywhere in the world
  • Remove restriction from only hiring from local markets
  • Enter any international market without the requirement of opening a local entity
Home » Countries » Europe » UK

As one of the world’s largest national economies with a broad scale of new business opportunities, the United Kingdom is the perfect fit for your global expansion plans. However, Brexit did make an
expansion into the UK a bit more complex. By using our PEO services, you can expand into the UK compliantly within days. The UK is renowned for its progressive vision and was amongst the instigators of
the Industrial Revolution during the 19th century. Although the Brexit initiated a turbulent period, the Trade and Cooperation Agreement with the European Union is expected to turn the tide and lead to a
rapidly growing and robust economy.

With London as one of the world’s largest financial centers and with a strong Services Industry led by Financial Services, the UK offers a market full of opportunities for your company to thrive.

What is a Professional Employer Organization (PEO) for the United Kingdom?

A PEO offers you a launchpad for global expansion. By using a PEO in the United Kingdom there is no need to set-up a legal entity including all tax registrations and complicated paperwork, and you can
start doing business within days. At Bradford Jacobs, we made it our goal to gain expert inside knowledge on UK payroll, taxes, labor laws, and other local regulations. By utilizing our sources, you can start
your global expansion hassle-free and at a low cost. We can provide specific support for payroll, taxation, Human Resources, and compliance issues as you expand your operations and enforce your
workforce.

If you are ready to start your global success with us, you can add new international talent to your company within days. We have the connections and network to locate talents that meet your needs and
wishes on all levels. Without the need for you to create a UK subsidiary, your new employee can benefit your business in the United Kingdom in days instead of months. Needless to say, but incredibly
important: we ensure your company complies with all regulations and laws, areas in which can incur severe penalties would you fail to adhere. Your chosen candidate is hired through our agencies in the
United Kingdom and remains under your day-to-day control.

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The UK – The Economy

The UK has a long history of being a globalized economy, being largely market oriented, as well as a social market – combining the capitalist ecosystem with social policy reforms. The country has been ranked as the 9th most competitive market in the world out of 140 countries, according to the 2019 Global Competitiveness Report which is published by the World Economic
Forum.

The UK can be characterized as a world-renowned business, which includes a highly educated workforce, attractive tax rates and incentives, as well as low labor and administration costs. The UK’s GDP in 2020 amounted to an approximate £1.96 trillion, taking a hit from the previous year, which amounted to an approximate £2.17 trillion.
The country has a long history of being an international trading economy, being at the
forefront on the Industrial Revolution in the 19th century. With strong commercial services, communications, and manufacturing sectors, as well as high-quality logistics and infrastructure, this creates an attractive environment for any business owner who seeks to expand their
business

However, The UK also has its sights set on preparing for the future, embracing innovation, sustainable consumption, and technological modernization, in an effort to reach a net zero economy whilst maintaining its strengths.

The UK’s geographical position benefits from access to diverse marketplaces in Europe, North America, Asia, and Oceania. There are a number of options for businesses to trade around the world in both simple and affordable ways. Trading in the UK opens businesses up to over 70 airports, 40 major ports, and the 4th largest rail network in Europe, which links major cities to mainland Europe via the world-class Eurostar rail service.

Small and Medium-Sized Companies

In the UK, there are 5.58 million businesses in the private sector. Out of that total, SMEs account for 99.9%, and they employ less than 250 employees. SMEs account for three fifths of local employment, engaging around 61% of the total labor workforce, which amounts to about 16.3 million people. SMEs turnover in 2021 amount to an estimate of £2.3 million, which is around half of the turnover in the UK private sector. Small and medium businesses have a great impact
on the economy, with their contributions increasing every year.

CountryThe United Kingdom
CapitalLondon
No. of States/Provinces4 states (England, Scotland, Wales, Northern Ireland)
Principal CitiesLondon, Cardiff, Edinburgh, Glasgow, Manchester, Birmingham, Liverpool, Bristol, Oxford, Cambridge, Brighton, Newcastle Upon Tyne and Gateshead, Leeds, York
LanguageEnglish
Local CurrencyGBP (British Pounds)
Major ReligionChristianity
Date Formatdd/mm/yyyy
Time ZoneUTC + 0
Country Dial Code+44
Population67.22 million
Border CountriesIreland
Tax Year6th April – 5th April of the following year
VAT &20%
Minimum Wage (National)£4.62 per hour (£ 4.81 in 2022)
Minimum Wage (Living)£8.91 per hour (£9.50 in 2022)
Taxpayer Identification NumbersUnique Taxpayer Reference (UTR)
Company Registration Number (CRN)
Leading SectorsFinance and banking, information technology, construction, oil and gas, government, healthcare, manufacturing
Main importsCrude and refined petroleum, vehicles, packaged medicines, computers
Main exportsMachinery including computers, vehicles, gems and precious metals, mineral fuels including oil, electrical machinery, pharmaceuticals
Main trading partnersEuropean Union, USA, Germany, Netherlands, France, China, Ireland, Spain, Belgium, Italy
Government TypeUnitary parliamentary constitutional monarchy
Current Prime MinisterBoris Johnson

The Main Sectors of the British Economy

The country focuses on the following key sectors, which all have a significant influence on the country’s economy:

  1. Finance: This sector contributed about £132 million to the economy in 2018 and employs over 24,000 people. The United Kingdom is also the largest financial hub in Europe, with its assets being worth over £4 trillion.
    Some of the largest financial companies in the world, such as Deloitte, KPMG, Ernst and Young (EY), and PricewaterhouseCoopers (PwC) have offices in London, with the industry employing over 24,000 people.
  2. Construction: This sector is seen as one of the major pillars of the UK’s economy, as it contributes most jobs (with approximately 1 million employees) and the largest gross value (adding approximately £138 billion annually). This industry not only encompasses building construction, but also fulfilling maintenance, repair, and the completion of new building and infrastructure construction contracts.
  3. Agriculture: Farming plays a crucial role in the overall UK economy, contributing an estimate of £9,435 million in 2020. About 60% of the food that is eaten in the UK is locally grown.
  4. Travel & Tourism: According to the Office of National Statistics, the tourism industry contributed over £28.4 billion pounds to the UK economy in 2019. The industry’s impact on the economy is strong, with currently over 33,000 people employed. Travel and Tourism is the fastest-growing sector in the country, and currently accounts for 11.9% of all jobs in the country, which is ahead of both financial services (8.9%), and banking (3.4%).
  5. Energy: It is one of the largest industries in the United Kingdom, indirectly employing approx. 450,000 people, with almost half of them being located in Scotland. Experts are expecting a substantial increase within the next few years.
  6. Manufacturing: The manufacturing industry has carried a lot of importance to the health of the economy since the first industrial revolution. It currently employs about 2.7 million people, and accounts for about 45% of total exports, which totals to around £275 billion.
  7. Media: The media industry in the UK includes film, music, and entertainment, which is worth over 68 billion pounds. The sector also employs over 2 million people, most of which are located outside of London.
  8. Fashion: This sector has experienced struggles over the last few years, but it is now experiencing steady growth. Currently, it is employing 55,000 and contributes over £32 billion a year, according to the British Fashion Council.
  9. Food and Drink: This includes the overall agri-food sector, such as wholesale, manufacturing, and retail. This sector accounts for over….

Compliance Highlights

Key Tax and Labor Authorities in the UK

HM Revenue and Customs – this department handles all tax and national insurance systems in the UK.

Social Security Advisory Committee – an advisory non-departmental public body, which is
sponsored by the Department of Work and Pensions. It provides impartial advice on social security and other related matters.

The Health and Safety Executive – it is the UK’s national regulator for the health and safety of the workplace.

The Pensions Advisory Service – this is an executive non-departmental public body which offers information and guidance to the public on personal, company and state pensions.

Laws that Regulate Labor Relationships

UK employment law is regulated by national legislation and collective agreements, all of which
have a great significance to the individual contracts between the employer and employee. Thus, companies and employers must be aware of the laws and agreements

Labor Contracts Law

In the UK, an employment contract is not required to be concluded in writing, but the law does oblige the employer to provide the employee with a written statement that includes specific information regarding the terms of their employment:

  • Personal/contact information about both parties
  • Job title of the employee
  • The date of the commencement of the employment relationship
  • Salary and payment intervals
  • The place of work and the registered address of the business
  • The hours of work and information about working patterns
  • Holiday, sick pay, and other paid leave entitlements
  • Notice period and probationary period provisions
  • Disciplinary and grievance policies
  • Training entitlements

Payroll – Tax Contributions and Benefits

National Income Tax: In the UK, an individual’s liability to pay income taxes is determined by their residency status and the source of their income. UK residents are taxed on their worldwide income, whilst non-residents are only taxed on certain types of income that are derived from local sources.

  • The amount of income tax that is paid in a tax year depends on two factors
  • How much of the individual’s income is above the Personal Allowance rate.
  • How much of an individual’s income falls within each tax band.

The first tax rate is known as the Personal Allowance, where no tax is requested on income that is under or equals to £12,570. An individual’s income tax is normally withheld from an individual’s salary under the PAYE system. However, not all earnings may be subject to PAYE, but there are a number of special schemes and reliefs that may be used to help limit the PAYE earnings or operate the earnings on an estimated or annual basis. In some cases, the obligation to operate PAYE is also removed.

Social Security Taxes: National Insurance contributions of both the employer and employee depend on the category that the employee is in, which consists of:

  • Category A
  • Category B – Married women and widows who are entitled to pay reduced National Insurance
  • Category C – Employers over the State Pension Age
  • Category H – Apprentice under 25
  • Category J – Employees who may defer National Insurance because they are already paying it at another job
  • Category M – Employees under 21
  • Category Z – Employees under 21 who may defer National Insurance because they are already paying it at another job
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