Thinking of Hiring in the UK? Here’s What You Actually Need to Know About Setting Up Shop

If you’re an international company eyeing up the UK as your next business move (or simply want to get someone on the ground without opening a full-blown office), you’ll quickly realise there’s no one-size-fits-all approach. Between Companies House, PAYE, HMRC, pensions and acronyms galore, the whole thing can feel like you’ve been dropped into the middle of a tax-themed escape room.

But don’t worry — this guide breaks it all down sensibly. Whether you’re registering a UK entity or just want to get payroll sorted without faffing about, we’ve got you.

Let’s start with the basics. If you want to operate in the UK — legally, visibly, and without a phone call from HMRC — you’ve got a few options:

This is the classic route and the go-to for many SMEs. You get a standalone entity with limited liability, your own UK registration number, and all the corporate bells and whistles. You’ll need a UK office address (yes, virtual ones count), at least one director, and you’ll be expected to file annual accounts. Here’s how to do it:
👉 Set up a limited company: step by step – GOV.UK

Think of this as your overseas company sticking a flag in the ground here. It’s still your company, just trading in the UK. You’ll need to register within one month of starting business here, and submit some documents to Companies House, including an English version of your original paperwork.
👉 Register as an overseas company – GOV.UK

Not ready for the full commitment? That’s fine too. You can hire someone through an Employer of Record (EOR), which handles employment, payroll, and admin for you. It’s fast, tidy, and keeps you out of the UK red tape.
👉 Simplify UK Employment with an EOR

Once you’ve got a business presence (or an EOR arrangement), the next headache is payroll. If you’re going direct, you’ll need to:

• Register as an employer with HMRC before your first payday. Yes, even if it’s just one employee.
  👉 Register as an employer – GOV.UK

• Set up PAYE (Pay As You Earn), which is the system you’ll use to deduct income tax and National Insurance from your employee’s salary.
  👉 PAYE and payroll for employers – GOV.UK

• Report everything in real time to HMRC, every time you pay someone. The system is called Real Time Information (RTI), and it’s exactly what it sounds like.

• Auto-enrol staff into a pension scheme if they’re eligible (which most full-time employees are).

  👉 Pension schemes for employers – GOV.UK

If you’d rather not wrestle with this directly, payroll providers exist for a reason — and they’re worth their weight in gold when things get fiddly.

If you’ve set up a UK limited company, you’re automatically registered for Corporation Tax when you register with Companies House. That said, you’ll still need to file a return each year and pay the tax on your profits (after expenses, of course).
👉 Corporation Tax info – GOV.UK

Running a branch? You’ll need to register separately with HMRC and make sure your accounting lines up properly between your home country and the UK.

Also worth noting: if you’re operating in the UK in any real sense (making sales, running services), HMRC will expect you to play by the local tax rules even if you haven’t got a formal business structure here.

If your head’s spinning and you’re thinking, “We just need one person in London to start next month; why is this so complicated?” — then an Employer of Record might be the fastest solution.

With an EOR, your new hire gets a fully compliant employment contract, payroll gets sorted, and you stay legally above board — all without incorporating in the UK. It’s not cheap, but it’s a clever workaround while you explore longer-term options.

There’s nothing inherently difficult about getting started in the UK — but it is layered. The choices you make early on (registering vs not, limited company vs branch, direct employment vs EOR) have a knock-on effect for everything from tax liability to how long it takes to pay someone legally.

If you’ve got a UK expansion in mind or just want to get payroll ticking along without the drama, this is the groundwork worth knowing.