How to Hire Employees in the UK Without Setting Up a Company

Want to hire someone in Britain but don’t want to establish a UK company yet?

For international IT businesses, an Employer of Record (EoR) can be one option to explore.

Instead of immediately creating a UK subsidiary or branch, a company can use an EoR provider that employs the worker locally while the client retains responsibility for the employee’s day-to-day work.

Can a foreign company hire someone in the UK?

Yes, but the correct structure depends on the various circumstances.

A company expanding into Britain generally has several possible routes, including:

  1. Establishing its own UK entity.
  2. Using an Employer of Record (EoR) framework.
  3. Engaging an independent contractor where the relationship genuinely qualifies as self-employment; or
  4. Using another UK compliant employment structure.

The important point is that businesses should not assume that calling someone a “contractor” removes HMRC employment obligations.

How does an EoR make UK hiring possible?

An EoR provider already has an appropriate local employment structure.

The EoR becomes the formal employer for the worker and manages relevant employment administration.

Where the client tech business normally remains responsible for:

  • assigning work
  • setting objectives
  • managing performance
  • determining the employee’s role
  • integrating the employee into the business

This makes the EoR particularly interesting for businesses that want to hire before committing to a permanent UK corporate structure.

What does the EoR normally manage?

Depending on the provider and contract, the service can cover:

  • employment contracts
  • payroll
  • PAYE
  • National Insurance administration
  • pension administration
  • statutory leave
  • employee benefits
  • onboarding
  • HR administration
  • employment compliance support

The exact scope varies between providers, so CFOs should examine the contract rather than rely on marketing claims.

What about right to work?

Right-to-work compliance remains important.

HMRC states that employers must check whether an employee has the legal right to work in the UK before employment begins.

Where immigration or sponsorship is involved, additional requirements may apply.

That means a UK EoR decision should involve HR, finance and, where appropriate, immigration specialists.

Is EoR cheaper than establishing a UK company?

Not automatically.

An EoR introduces a service fee, so the correct comparison is not:

EoR fee vs company registration fee.

It is:

Total EoR employment cost vs total cost of owning and operating the UK employment structure.

A company structure can involve accounting, payroll, tax, banking, corporate filings, professional advice and ongoing administration.

An EoR can consolidate much of the employment administration into one commercial relationship.

When should you establish your own UK entity?

A company may eventually make more sense when:

  • UK revenue is becoming material;
  • headcount is growing rapidly;
  • the UK is a core strategic market;
  • the business needs a local commercial presence;
  • investors or customers require a local structure;
  • the company wants greater control over its UK operations.

The right decision depends on the business model rather than employee count alone.

The CFO test

Before choosing an EoR, build a 12–36 month model.

Compare:

Option A – EoR framework

Salary + employer costs + EoR fees + benefits + other employment costs

VS

Option B – UK entity

Employee costs + payroll + accounting + tax + professional fees + corporate administration + banking + compliance

This turns an HR decision into a proper financial decision.

Ready to Scale Your Global Tech Team?

If you need to hire one or a small number of people in UK while keeping your corporate structure lean, an EoR may be worth evaluating.

If Britain is becoming a major operating market, establish a longer-term plan rather than using an EoR indefinitely by default.

About Accounting helps businesses research and compare these options. We do not directly provide EoR services.

For businesses evaluating providers, we may link to platforms including Deel and Multiplier through affiliate partnerships.

Affiliate disclosure: About Accounting may earn a commission if you take any service through certain links. This does not increase the price you pay.

This article is general information, not legal, tax or employment advice.

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