How to have UK Employees for an Overseas Company (without losing your mind!)

May 26, 2025

If you’re running a business from outside the UK and are now thinking, “Hmm, we could do with someone on the ground there,” then you’re not alone. More overseas companies are looking to build a UK presence, without necessarily launching a full-blown UK branch.

Whether you’re picturing a home-based UK employee, a regional office, or just dipping a toe into the British talent pool, the question is: how do you go about setting up UK employees for an overseas company?

Let’s break it down into four manageable chunks: registration, HR rules, payroll admin, and, of course, the cost.

1. Registering as an employer (Mostly simple, occasionally a headache)

The first thing you’ll need to do is register as an employer with the UK tax agency, HM Revenue and Customs (HMRC). If you’ve got a UK-based director with a National Insurance number, you can usually do this online at gov.uk.

But if your company has no UK director or fixed UK office, you’ll need to do it by post or phone – yes, post still exists. In these cases, HMRC may want to double-check that PAYE (Pay As You Earn) is even necessary if you don’t have a UK base. Spoiler: sometimes it is, sometimes it isn’t. They like to keep us on our toes.

What you’ll need to hand:

Company name, address, and contact details
Trading name (if different)
What your business actually does (e.g. software development, electrical engineering, goat herding, etc.)
Company registration number and UTR (Unique Taxpayer Reference)
Director names and NI numbers (if they have one)

All sounds straightforward, until it isn’t, which is why many overseas businesses prefer to use someone like us to do the setup.

Don’t want to deal with HMRC at all?
Contact us at [email protected], and we’ll take care of it for you.

2. HR rules (Welcome to the UK employment maze)

British employment law is… well, thorough. So the second thing you will need to do is make sure you comply with the HR rules. Here’s the short version:

A written contract of T&Cs must be given on or before your employee’s first day. No exceptions.
There are legal minimums for wages and statutory payments for paid leave (e.g. sick leave, maternity or paternity leave, holiday leave etc), and a maximum number of working hours they can work.
You must check they are legally allowed to work in the UK (don’t just take their word for it).
If you’re giving benefits or reimbursing expenses, all of that needs to be reported, and some of that needs to be taxed.
Termination isn’t just a dramatic word; it comes with processes you have to follow (e.g. a minimum notice period)..

Oh, and yes, they do get Bank Holidays. Even if they insist on calling them that.

3. Payroll admin (This monthly task can become annoying)

The UK loves a good acronym, so let’s introduce RTI – Real Time Information. Every time you run payroll, you report to HMRC. Live. No delays. No fudging.

Here’s what you need to know:

Reports are submitted each pay run – whether weekly or monthly, one or two reports are required.
Starters and leavers? These need to be reported too.
All RTI reporting is done online through payroll software, so it is directly reported to HMRC.
HMRC will send tax code changes – ignore these notices at your peril! These codes are used to calculate the amount of employee tax deductions.
You’ll pay deductions monthly (income tax, NI, pensions etc).
The UK tax year-end is on 5 April, and every employee will need a P60 report.
Does your company give Benefits in Kind? Say hello to the annual P11D form.

None of this is hard, per se, but it’s relentless. It’s a lot of monthly admin, so you will either need a system or someone who has one.

4. What it actually costs

Now to the money bit, because hiring someone in the UK is not just about salary. You’ve got add-ons to be aware of and think about, like:

The agreed salary or hourly wage (obviously).
Employers’ National Insurance Contributions (currently 15% for most employers as of April 2025).
Pension Contributions (at least 3% of qualifying earnings over a threshold, under auto-enrolment rules).
Employment Allowance (some businesses can claim up to £5,000 off their employer NI bill).
You’ll also be responsible for deducting the employee’s contributions (e.g. income tax, NI, student loan, and pension contributions – each month and send it off to HMRC).

The cost can stack up fast, but with the right advice, it doesn’t need to catch you out.

Can someone just do this for me?

Yes. Us.

At JVCA, we handle the entire process of setting up UK employees for an overseas company, from registering with HMRC to sorting HR compliance and running your payroll each month. We’ll even field questions from HMRC, so you don’t have to spend your afternoons wondering what a P11D is (or how it ended up on your to-do list).

All you need to do is pay your employee, and the deductions we tell you about, and we’ll take care of the rest.

Thinking about setting up UK employees for an overseas company?Let us get the admin sorted, so you can focus on your business – not British bureaucracy.Contact us at [email protected] and let’s get things moving.