How best for an EU company to employ someone in the UK?
October 26, 2007 2:44 AM Subscribe
UK employment/company law. How best for an EU company to employ someone in the UK?
There is a multinational, with European HQ/manufacturing in Italy. Some employees work remotely, including one employee in the UK. I'm given to understand that the Italian company cannot employ someone directly in the UK. Is this true? If so, what is the most cost effective manner to employ this person in the UK, while retaining the job security of an employee?
There is a multinational, with European HQ/manufacturing in Italy. Some employees work remotely, including one employee in the UK. I'm given to understand that the Italian company cannot employ someone directly in the UK. Is this true? If so, what is the most cost effective manner to employ this person in the UK, while retaining the job security of an employee?
Best answer: The employee can indeed be on the payroll of the Italian company in Italy.
However, since the employee is domiciled in the UK, the Italian company should pay him in full without making tax or social security deductions. The employee is responsible for paying tax to the Inland Revenue. Under this arrangement the employee has the same employment rights as her Italian colleagues under Italian law. These are worthless, of course, unless she's also prepared to go to Italy and defend them with Italian legal representation in an Italian court which speaks only Italian.
The employer may, additionally, be responsible for telling local tax authorities about the employee so that the Italian revenue service can inform their UK counterpart through channels. Or it may not.
It's almost certainly less annoying all round to be self-employed and invoice the Italian company instead, however.
posted by genghis at 7:34 AM on October 26, 2007
However, since the employee is domiciled in the UK, the Italian company should pay him in full without making tax or social security deductions. The employee is responsible for paying tax to the Inland Revenue. Under this arrangement the employee has the same employment rights as her Italian colleagues under Italian law. These are worthless, of course, unless she's also prepared to go to Italy and defend them with Italian legal representation in an Italian court which speaks only Italian.
The employer may, additionally, be responsible for telling local tax authorities about the employee so that the Italian revenue service can inform their UK counterpart through channels. Or it may not.
It's almost certainly less annoying all round to be self-employed and invoice the Italian company instead, however.
posted by genghis at 7:34 AM on October 26, 2007
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posted by adamvasco at 6:27 AM on October 26, 2007