How to hire in the UK from the US

Margaret Nguyen3 minutes
How to hire in the UK from the US
In this article

If your business is doing well and looking to expand, it’s likely that hiring in the UK is on your radar. It’s home to one of the largest economic hubs in the world and is a great place to find educated, motivated, and talented people for your growing company. 

Here we’ll guide you through how to quickly find and hire the best talent in the UK from the US to support your expanding business. 

Why you should hire in the UK in the first place

Hiring in the UK is a smart move because of its few language barriers and incredible talent pool. 

Those in both the US and the UK speak English. Certain dialectical and spelling differences aside, you should have no issue adapting your products and materials to a UK audience — no translation necessary.

There’s also an incredibly varied talent pool in the UK. More qualified software engineers and AI experts reside in the UK than any other European city. The UK is also home to 2.3 million specialists in the financial and professional service sectors.

With more than 58.5% of people educated to at least degree level, the UK is a true hub for global talent. And with a growing eCommerce market, straightforward taxes, and several freeports that encourage economic activity, companies are able to save significant amounts of money when moving products internationally.

Who to hire: contractors vs. employees vs. freelancers

Once you’ve decided to hire in the UK, your first decision will be whether you want to hire a contractor, employee, or freelancer.

Contractors and freelancers are both self-employed workers hired for particular assignments or blocks of time. Freelancers usually take on numerous clients at a time, while contractors typically stick to one for the duration of a contract, which typically lasts anywhere from a few weeks to months. 

Employees are those who work for a single company and devote all of their time to it on a regular basis. Essentially, there’s no contractual “end” in sight. 

Pros and cons of each

Hiring employees benefits your business by giving you complete control over the employee’s time during work hours. Employers also have the power to limit an employee’s work focus solely to their company, in addition to assigning their tasks and directing how they work on them. 

However, hiring employees comes with more payroll and tax responsibilities, unlike hiring a contractor or freelancer.

Since contractors and freelancers are technically self-employed, they’re responsible for withholding their own taxes and accounting. Employers still have to report the annual amount paid on forms such as the 1099-MISC, but they don’t have to withhold or pay taxes on those payments. 

One of the drawbacks to hiring freelancers and contractors is that, while you’re allowed to assign tasks and deadlines, you can’t tell them how to get the job done. This can lead to some tension if you like things done a certain way. 

Freelancers and contractors also impose their own work hours. Even if your business runs from 9 a.m. to 5 p.m. EST, it’s the contractor or freelancer’s choice to work in or outside of that time frame. 

How to convert an international contractor to an employee

Your business may decide to hire a UK contractor and then bring them on full-time down the road. Perhaps you want time to assess their quality of work first, or have growing needs that require more attention.

Luckily, converting overseas contractors to employees isn’t as difficult as it is time-consuming. 

You’ll essentially need to change the way you pay, tax, and assign work. Failing to maintain compliance with any of these areas can result in hefty consequences such as sky-high fines.

According to Oyster, you need to follow this process when converting a contractor to an employee:

  1. Verify the worker’s classification.

  2. Notify that worker in writing.

  3. Collect any necessary documents from them.

  4. Adjust payroll immediately and correctly.

  5. Properly onboard the employee.

  6. Send out end-of-year tax forms.

  7. Create a subsidiary company.

  8. Hire an employer of record (EOR) service.

Freelancing platforms

You’ll likely want to work with a freelancing platform if you decide to hire a freelancer rather than an employee or contractor. Freelancing platforms connect thousands of businesses with freelancers across the globe. 

Here are some of the most common freelancing platforms that businesses use to source workers:

  • Fiverr: Fiverr is an Israel-based online marketplace that allows both listing and applying for freelance services. Clients purchase particular services that are predefined by the freelancer. 

  • Upwork: Upwork allows freelancers to bid on specific projects by sending cover letters and applications for available jobs. 

  • Guru: Guru has a simplified hiring process for businesses looking for freelancers. They accept virtual signatures for job orders, resulting in projects starting and closing out faster. 

  • Toptal: Toptal requires freelancers to maintain high ratings for customer satisfaction. So, if you’re an employer looking to hire, you’re more likely to get a skilled worker. They also allow a two-week test period with your new hire.  

How to hire: required paperwork and resources for hiring in the UK

And now for the logistics. You’ll need to fill out various tax forms and contracts as a global business hiring overseas in the UK. 

Managing your taxes

It’s incredibly important to streamline your accounting and keep your taxes straight. Working with highly rated tax and accounting solutions — such as A2X and hellotax — can help.

A2X is specifically designed for eCommerce businesses. They make it easy for global businesses who sell through Amazon, Shopify, Etsy, eBay, and more to manage their finances. Setting up an account with A2X is free and only takes a few minutes. 

Hellotax also works with eCommerce businesses and is a life-saver when it comes to value-added tax (VAT), which is a requirement in the UK. You can essentially put your VAT on autopilot because they take care of VAT registration and any relevant filings. 

“Growing your business by expanding to new markets is important to be done, while always considering the legal duties that come with it.”

- hellotax

Required forms and contracts 

There’s a general process you need to follow in order to hire a foreign employee in the UK:

1. Obtain necessary certification: Contact the US Department of Labor and follow their particular requirements for hiring abroad: 

  • Provide evidence of your need to hire a foreign worker to fill a vacancy.

  • Show that the vacancy meets the criteria you’ve selected in the Foreign Labor Certification Program.

  • Complete and sign the appropriate electronic travel authorization (ETA) form.

  • Prove you can provide a prevailing wage.

  • Mail that form and all other attachments to a designated office. 

2. Obtain work visas: After you’ve conducted interviews and chosen a candidate, you’ll need to sponsor a work visa. You’ll have to apply for a Labor Condition Application (LCA) and provide requested documents as well as company statements. You’ll then need to file a petition for a visa on the behalf of your foreign hire.

3. Comply with tax regulations: Foreign employees that are in the UK will need to complete the necessary tax form, Form W-8 BEN

Payroll guides 

As a US employer hiring in the UK, it’s best practice to use a highly rated resource for managing your HR, payroll, and benefits for your team across borders.  

Oyster is a great solution for hiring, paying, and providing benefits to international teams. Their easy-to-use platform helps you manage your payroll, HR, and compliance across 180+ countries.

“When hiring in the UK, you’ll need to consider a few things, including employer taxes and contributions, notice periods, paid time off, and parental leave. Employers engaging talent in the UK should also be mindful of employee misclassification, especially for self-employed contractors vs. full-time employees. Employee misclassification could result in financial penalties and other legal liabilities, so remaining compliant is critical.” 

- Oyster

Legal considerations

There are various legal and compliance obligations you’ll need to consider as a US employer hiring a foreign worker in the UK.

Most major countries have two-way tax treaties and, in most instances, foreign hires are familiar with their local obligations and which laws apply to your employment agreement with them.  

However, if you’re hiring an independent contractor in the UK rather than an employee, the hiring process is actually quite easy. Since contractors manage their own finances, you don’t necessarily need a contract, but it’s smart to have one in place.

Contracts with contractors prevent your company from potentially steep fines and other consequences from HM Revenue and Customs (HMRC) if they decide to audit you. A contract proves that you’re not treating the worker as a full-time employee.  

Contact Airwallex for your UK expansion financial needs

So, with an abundance of diverse professionals, a growing eCommerce market, and cost-saving factors such as straightforward taxes and freeports, it makes sense to hire in the UK and further expand your business.

One final resource to consider is Airwallex. Airwallex enables you to create a free foreign currency account to manage your international finances. We charge minimal to no fees, offer low foreign exchange rates, and work with multiple currencies. 

Related article: The ultimate guide to paying overseas vendors

Back to blog


Margaret Nguyen

Subscribe for our latest news and updates

Related Posts

June release notes: US payment acceptance updates, transparent transfers and Hong Kong B2B travel cards

June release notes: US payment acceptance updates, transparent tr...

5 minutes

Navigating KYC, KYB, and RFIs: Your Compliance Guide

Navigating KYC, KYB, and RFIs: Your Compliance Guide

3 mins