Attracting talent to the UK: navigating immigration, employment law, and tax

This webinar discussed strategies for attracting talent to the UK, focusing on immigration, employment law, and tax considerations. The panelists highlighted global mobility trends, emphasising the shift towards sourcing talent overseas and the importance of compliance with new regulations like the electronic travel authorisation (ETA). They covered the necessity of separate employment contracts for short-term assignments, tax and social security obligations, and the process for sponsoring skilled workers. The session also explored options for EU businesses establishing UK branches, stressing the need for detailed documentation and careful planning to navigate legal and tax requirements effectively. The panelists have prepared the following key takeaways from the session:

Immigration

• A UK business must apply for a sponsor licence in the Skilled Worker category to employ migrant workers (based overseas or in the UK) who do not hold UK immigration permission allowing them to work. In the licence application, the business must establish that they are a legitimate business operating and actively trading in the UK, that the roles they intend to sponsor will meet the requisite skill-level and salary requirements, and that their organisation has systems in place which will comply with the various sponsorship duties.
• For overseas businesses intending to send employees to work in the UK on fixed-term assignments, the type of sponsor licence they must apply for will largely depend on whether there already exists an actively trading and operating UK branch/subsidiary linked by common ownership/control to the overseas entity.
• Planning and timing are crucial in the sponsorship process. Preparation should not be rushed for a licence application, as a refusal can come with a six-month cooling off period before reapplication is allowed. Once submitted, standard processing times are up to eight weeks, with the option to expedite to ten working days for certain licence categories.
• From 2 April 2025, all non-British/Irish (including EEA/EU nationals) visitors to the UK must be issued with an ETA prior to travel, if they do not hold another form of UK immigration permission. If an overseas employee is coming to work in the UK (outside the scope of the permitted intra-corporate visitor activities), regardless of the length of the time spent in the UK, a work visa or non-sponsored visa (which permits work) will be required.

Employment Law

•  Employers could use secondment agreements or fixed-term contracts for short term assignments to the UK and can chose the home or UK entity to be the employer. They should ensure contracts include UK statutory minimum rights and maintain clear terms for the relationship’s duration and ending.
• An employer who has offered a job to a candidate with an expiring graduate visa should consider all possible alternatives and follow a fair and well- documented process before considering withdrawing the offer. This ensures that the candidate is treated fairly, helping to avoids any automatic unfair dismissal and discrimination claims.
• For sending senior employees to the UK to set up and manage a branch, secondment agreements, whilst keeping the employees on their home contracts, are a popular option, potentially offering tax benefits. Conversely, permanent or fixed-term UK contracts do not offer tax benefits but provide stability. Employers should ensure that contracts cover benefits, relocation costs, and assignment procedures.
• Avoid unconditional offers with definite start dates to prevent legal complications. Offer contracts with delayed start dates, conditional on visa or sponsorship approval. Keep applicants informed about processes, options, and risks.

Tax

• If you are in the UK and part of an international group with people who travel between offices, make sure you have a short term business visitors arrangement with HMRC for countries that have a tax treaty with the UK. For those countries where there is no treaty, payroll will be required from day 1. It is possible to apply to HMRC for an agreement to run an annual payroll for these purposes.
• Make sure you know where your employees are working from, particularly if their family live outside the UK and they request to work from home. Have a policy in place that is clear in terms of what is allowed and what isn’t when it comes to working temporarily overseas.
• Always seek advice in advance of either bringing an employee to or sending them from the UK. It is important to make sure you are compliant for UK tax and social security purposes, but also you may be able to save money by using tax planning tools.