Ireland and UK Payroll
If you’re a non-resident company and need to register as an employer in the UK or Ireland, we can help. At St Matthew, we provide payroll, accounting and tax services to foreign businesses in multiple sectors.
Some of the services we provide include:
Registering your company as a UK or Ireland employer.
Specialist advice on income tax.
Setting up and operating payrolls.
When employing someone in the UK or Ireland, there is a complex legal framework, and while we can’t detail everything on this page, we can provide a brief overview of key areas:
As a foreign company, you can employ someone in the UK or Ireland even if you don’t have a branch or subsidiary in either destination. You only need to register as a foreign company if you have some degree of physical presence in the countries through which you conduct business.
Registering as a Foreign Employer
In the UK, you must register as an employer with Her Majesty’s Revenue and Customs (HMRC), the country’s equivalent of the IRS, even if you only have one employee. This must be done before your first payday. It will then take up to five working days to receive the employer Pay As You Earn (PAYE) reference number, which is required to ensure all taxes are paid correctly.
PAYE is a tax on the earnings of employees, which is deducted by employers and paid to the tax authorities. Social security contributions are also deduced from earnings and paid to the tax authorities. In Ireland, registration of employees is with Revenue Ireland.
When you register as an employer in either country, you will need a tax representative, an address where the revenue services can contact you. We can set this up for you.
When you employ someone in the UK or Ireland, you become a UK or Irish employer, which means you are subject to local employment laws. For example, UK employees have a legal minimum entitlement to several key benefits, such as:
- Minimum hourly pay rates (these vary according to age and employment status).
- Paid holiday entitlement. Typically this is 5.6 weeks per year for a full-time employee.
- A statutory minimum length of rest breaks.
- To not work more than 48 hours per week on average. However, workers can opt out of
this if they want.
There are no differences in employee rights between England and Wales, but some apply in Scotland, Northern Ireland and Ireland.
Note that you do not need a bank account in Ireland or the UK to pay your employees’ wages.
You can transfer the funds directly from your bank account in your home country on a monthly basis.
An important consideration to bear in mind when you have employees in another country is the potential for becoming a permanent establishment (PE). A PE is created by business activities that are sufficient to be viewed as having a stable and taxable presence in a country. If the activities result in profits, the host nation (in this case, the UK or Ireland) may impose corporate taxes.
There are two types of permanent establishment.
- A place of business (i.e., a shop, factory or office) in which a non-resident company’s employees conduct work on behalf of their employer.
- A dependable agent, someone who is not independent of the non-resident company and does business for them.
We understand that becoming a permanent establishment might not be a desirable situation for some international companies that don’t want to risk suddenly exposing themselves to Irish or UK corporation tax. Therefore we are available to help you review your status on a regular basis.