Employing European nationals PDF Print E-mail

Most nationals from the European Economic Area (EEA) can enter and work in the UK without restrictions. You will need to ask nationals from all EEA countries to produce a document showing their nationality. Please refer to List A to see which documents will provide you with a defense if checked and copied.

The following is a list of EEA countries: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Republic of Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, The Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UK, Switzerland.

The Government has set up a Workers Registration Scheme to monitor the participation in the UK labour market of workers from the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. Please contact the Home Office for more information.

If you employ a Bulgarian or Romanian national you must adhere to certain regulations:

  • You must advertise the position
  • You must apply for a work permit on their behalf (free of charge)
  • The candidate must fill in a BR3 form, which validates the work permit (if the application is successful)

Please note that the work permit application may not be successful if the Home Office considers that a UK national can competently do the type of work you are offering.

Once you have established the person has a right to work you will need to make sure that they register with the Home Office. For them to be able to do this you must provide them with evidence of the employment (a contract or a letter).

You must then take a copy of the completed application for registration before it is sent to the Home Office. You must keep this copy until you receive notification from the Home Office that the worker has been registered successfully.

The Home office will send to you a copy of the registration certificate and you must retain this copy.

 

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Benefits in kind

Benefits in kind are sometimes provided by the employer in addition to the employee's salary. They are often taxable benefits and must be reported annually as part of employee's gross earnings.

Who pays the tax?
Benefits in kind offer a good example of why it is important to agree a gross wage with your employee. In almost all other types of employment the employee is always responsible for paying the tax on benefits. But as many domestic staff have net pay arrangements it means that you, the employer, are responsible for paying this tax, which can potentially be a very expensive experience.

Tax on benefits in kind is payable in arrears and is not reported until July following the end of the tax year. Sometimes it can take up to two years before payments are claimed by HMRC, and during the interim your employee can have moved from one job to another, leaving the new employer responsible for paying what can in some cases be a very large sum of money. If your employee is on a gross wage, however, then the tax is deduced from their gross income at their current rate of tax.

In addition to tax there may also be a Class 1A NI charge of 12.8% of the value of the benefit to be paid - the employer always pays this charge.

Examples of taxable benefits

  • Car
  • Accommodation
  • Health Club Membership
  • Travel
  • Interest Free Loan

NB: PLEASE NOTE THAT THIS LIST IS NOT EXHAUSTIVE.

Mobile phones are not considered a taxable benefit

Use of Car
The use of a car is not considered a taxable benefit if your employee only uses it during working hours. If however your employee is permitted to take the car home and use it as a means to get to and from work, then it must be reported as a benefit in kind.

Accommodation
If accommodation is provided for the employee and it has a separate front door and separate metering for gas, water and electricity, it is considered a taxable benefit and must be reported as such.

Please note that the information and examples contained on this page are to be used as guidelines only. If you have specific questions please contact Stafftax.