As per Rome’s Convention dated 19-04-1980, social charges must be paid where the employees effectively work ( place of work) ;
Be Careful !: if you recruit an employee in the UK (whatever nationality), for him/her to work in France straight away, then your company will be submitted to French labour law and will have to declare and pay social charges in France.
Other option : detached employee - A1 form (EU Law)
Compulsory pre-registration procedures :
- You must register your company to NICs (National Insurance Contributions) & PAYE (Pay As You Earn) : you will obtain 2 references to be used for every contact with HMRC.
- Fill in a “New Employee Form” to set up social follow up with SEDI.
Send to us your new employee’s P45 if he/she already worked in the UK (document always issued by a company at the end of an employment contract) :
If there is no P45 : your employee will have to fill in a P46 form
- Ask your new employee his/her NI Number (National Insurance Number - social security Number). If the employee has none yet; he/she must ask one to the nearest “Benefits Agency / Job centre” of his/her home address.
This information will enables us to obtain the employee’s tax rate (PAYE) and NI classification.
PAYE = PAY AS YOU EARN = Income tax
NI = National Insurance (employee's charges)
NIC = National Insurance Contributions (employer's charges)
Very easy to understand !
Total cost for the company = gross wage + NIC
NET PAY = gross wage - (PAYE -+ NI)
Be Careful! : the British net PAY takes into account the individual income tax deduction.
Payment of social charges :
NICs & PAYE must be paid on a monthly or quarterly basis (depending on number of employees and amount of social charges). Payments are made to HM Revenue & Customs (HMRC).
Additional corporate schemes ( non compulsory) :
On a contractual basis—as an incentive—many UK employers include additional corporate schemes to their job offer, such as pension plan, life or health insurance, or even provide to their valuable employees an income protection in case of long illness.
! Since April 2010, the employer is obliged to set up a Corporate pension plan if there are at least 5 employees;
NOTE : The social cover is not very comfortable in the UK, that’s why we advice to offer those kind of social benefits after the trial period or after 6 months/1 year with the company. This will benefit your company by disminishing turn over amongst your team !
Even if a written employment contract is not legally compulsory in the UK, we advice to make one in order to resume duties of employer and employee, including :
Identity of parties involved
Starting date and trial period
Job title and position,
Rate of pay and bonus policy
Time of work & schedule
Place of work
Benefits (car, health insurance, pension plan…)
Disciplinary and grievance procedures
Be careful! : Some benefits are subject to « benefits in kind » like Health insurance and company car. Returns are made via the form P11D, to be declared and paid once a year in July.
ECHEANCES IMPORTANTES :
6th of April year N: beginning of British tax year
5th of April year N+1: end of British tax year
19th of each month: deadline of payment of NICs et PAYE for previous month.
19 of April : deadline for payment of last NICS & PAYE of tax year
19th of May : deadline to send P35/P14 (Employer annual return) to HMRC.
31st of May : deadline to send P60 to each employee (P60 confirms employee’s final tax code and shows total earnings of the tax year. To be kept by employees for self assessments).
6th of July : deadline to declare and pay P11D (benefit in kind’s declaration).
IF YOU NEED ADVICE OR ASSOCIATED SERVICES: CONTACT SEDI!