Remote work is showing no signs of slowing down. For employers new to the remote work sphere, they may be asking themselves what remote work is. What does it entail? What do I need to consider? Does my UK bank account need to be in the same corporate group as my employer? Can I hire from anywhere, including the United Kingdom? For employees looking to go to the UK, a common question these days is if there is a UK remote work visa.
As employers ask themselves these questions, there are also questions remote workers in the United Kingdom ask themselves as well. Those working remotely from the UK may have questions regarding classification, where their employer is based, and how their employer manages remote workers.
At Borderless, we’re here to help you answer these questions. Here’s your guide to remote work in the United Kingdom, and what questions those working remotely from the UK may ask themselves.
What is Remote work?
What exactly is remote work? What are the policies associated with it? And are there compliance risks by having team members work remotely?
To put simply, remote work is when employees can work outside of a central office location. They complete their job through their laptop and a strong internet connection.
Remote work is shown to have many benefits for employers and employees alike. Employers can access a global talent pool to hire the right person for the job, and employees can have improved flexibility and better work-life balance.
In terms of compliance, if a company uses the right methods and processes, remote work can be compliant. When hiring someone working remote from the UK, be sure that they have the correct right-to-work entitlements and that you, the employer, have the legal right to hire in that country. This can be accomplished by the employee having a UK remote work visa or with the company working with an Employer of Record, such as Borderless.
What is working remotely like in the UK?
The United Kingdom is fully onboard with remote work. Hubs like London, Manchester, Edinburgh, and Cardiff are filled with co-working spaces. And, more and more employers are choosing to offer their remote employees tailored benefits, such as a home office stipend, co-working pass, or the opportunity to work abroad.
In 2019, only 12% of UK-based employees were working from home. As of 2023, that number rose to 44%. With the UK’s low unemployment rate — which in August 2023 is 4.2% — and an increasing number of employers choosing to offer remote or hybrid work, this number is only expected to rise.
Does the UK have a remote work visa?
While many other countries in Europe, such as Portugal, Spain, and Estonia offer digital nomad visas to attract more remote team members, the United Kingdom does not. Unfortunately, an official UK remote work visa does not seem likely in the near future, considering the government’s stance on net migration.
However, what many consider to be the UK remote work visa is their Standard Visitor Visa. This visa is the standard tourist visa and there are no specific conditions that prohibit remote work for foreign companies.
That said, workers should be genuinely employed overseas rather than seeking a job with a UK-based employer. This may apply to a self-employed person or an employee with a flexible working arrangement with an overseas company in their home country. Employment overseas remotely whilst visiting the UK is possible, but only for the duration of the person's legal stay in the country.
Many people do not actually need to apply for this visa. For instance, those from the United States, European Union, Canada, Australia, and New Zealand can arrive in the UK, visa-free, and stay for up to six months. However, they must not work for any UK companies while there.
The Youth Mobility Scheme Visa also allows young professionals, aged 18 to 30, to live and work in the United Kingdom for two years. This allows people to continue to work remotely or find work in the United Kingdom if they choose to do so. This UK remote work visa is only eligible for citizens from the following countries:
- Australia
- New Zealand
- Canada
- Monaco
- San Marino
- Iceland
Despite there being no official remote work visa in the United Kingdom, other flexible working arrangements are in full swing. The UK’s new Flexible Working Bill allows employees to request flexible or remote working arrangements from the first day of their employment. Previously, employees were only allowed to request flexible working arrangements 26 weeks into their employment.
Be wary of working remotely in the UK. A remote working arrangement with a UK company may require a proper work permit and trigger a UK tax residency, especially if a remote employee gets paid with a UK bank account. Make sure to adhere to the country's immigration laws whilst in the UK.
Question #1: Am I classified correctly?
While it’s not the employee’s responsibility to ensure they’re classified correctly, it is a good question to ask themselves. The United Kingdom categorizes full-time employees differently than independent contractors and workers. There are specific criteria in place for doing this, so employers are expected to follow them if they want to avoid penalties, fines, and in some cases, reputational damage.
For instance, if an employee works under an employment contract, they are considered an employee. They will have more rights and benefits than what the UK considers a worker or an independent contractor.
Workers in the United Kingdom
What exactly is a worker, though? A worker is an umbrella term that considers numerous types of employment. Those who are full-time employees, part-time employees, short-term workers, casual labourers, or agency workers can be classified as workers. Basically, if someone has their work directly managed, they are considered to be a worker.
Workers in the United Kingdom are entitled to benefits and protections, such as the minimum wage, paid time off, healthcare, and pension.
Knowing the difference between a worker and an employee
It gets complicated when differentiating between employees and workers. Employees are in subordinate working relationships with their employers. Employers must have work for them to do — they cannot say no to a task.
Workers, on the other hand, have the liberty to say no to a task, or, employers are not legally required to provide them with work all the time.
While all workers, including employees, are entitled to receive the national minimum wage, paid time off, healthcare, and pension, employees receive additional protections and benefits. These benefits and protections include:
- Protection against unfair dismissal
- A notice period if employment is being terminated
- Statutory redundancy pay
- Time off in case of emergency
- The right to ask for a flexible working environment
Independent contractors in the United Kingdom
Independent contractors are in a completely different classification than workers and employees. Independent contractors manage their own work, are not in subordinate working relationships, and are not entitled to any benefits. Overall, independent contractors take complete responsibility of running their business and their projects.
Independent contractors and income tax
In the United Kingdom, independent contractors are not enrolled in the Pay As You Earn (PAYE) Scheme. Independent contractors are required to file and pay their own taxes and National Insurance contributions. Additionally, independent contractors are not entitled to any of the rights, benefits, and protections that workers and employees receive.
Risk of misclassification
For National Insurance, tax, and legal purposes, employees need to be classified correctly. Employers must not use worker to refer to as an employee or independent contractor — a worker is a classification of its own. When drawing up employment contracts or independent contractor agreements, be sure to correctly classify the new hire.
If HMRC finds out that an employer has misclassified an employee, worker, or independent contractor, you may face financial and legal penalties. For instance, if an employer has misclassified an employee as a contractor, they will be automatically entitled to all the benefits they should have received in the past.
As a result, the employer will be paying for the time off the employee should have been receiving and social security contributions. To put it simply, misclassifying an employee is quite expensive and causes significant financial confusion.
Why would an employer misclassify an employee, though? While sometimes this occurs inadvertently, sometimes employers do it on purpose as a way to avoid taxes and the associated costs of hiring an employee.
Question #2: Has my employer managed people working remotely before?
Managing a remote worker will be different from managing on-site employees. As a result, some employers — especially those who have new remote teams — may not know how to effectively manage their remote employees. With the right approach, processes, and tools in place, managing a remote team can be easy.
So, remote workers in the UK should ask themselves if their employer has worked with a remote team before. This can make the process — hiring, onboarding, and fulfilling the role — a pleasant and positive experience for both the employer and new hire. It also helps employees who are working remote from the UK have open communication channels and have clear expectations.
The future of remote work in the United Kingdom looks optimistic. Remote work is no longer a trend among employees, rather a preferred lifestyle, so it’s likely that employers will continue to offer it. However, with that, employers need to know how to manage remote employees. There needs to be infrastructure, support, and processes in place to guarantee that remote workers are comfortable and successful in their roles.
Implementing a Remote working policy
What is a remote work policy, exactly? A remote work policy is a key factor when employers hire employees working remote from the UK. Remote work policies are not mandatory but are incredibly beneficial when having distributed employees.
Remote work policies streamline remote work and make managing a remote team a relatively seamless and transparent process. Without a remote work policy, employees and employers alike may both experience confusion, frustration, and mixed communication when it comes to fulfilling their daily tasks and responsibilities.
A remote policy allows an employer to put clear guidelines and expectations in place for their remote employees. Remote work policies also allow employers to manage any risks that may arise that are associated with working remotely from the UK, such as termination laws, labor laws, or leave entitlements.
A remote work policy also sets standards across the company — no matter where the employee resides. An employee could be working remote from the UK, Mexico, or Canada, and the same policies would still apply.
Flexible work vs. remote work policies
Employers need to be aware of the difference between a remote work policy and a flexible work policy. In some instances, these terms may be used interchangeably, but it’s important to note that there are stark differences between the two.
A flexible work policy refers to when an employee works, whereas a remote work policy is in regards to where an employee works from.
An employer can choose to have a remote work policy and a flexible work policy in place. However, it must be clearly noted and the differences must be clear.
Key components of a remote work policy
Employers are free to create their own remote work policy and include what they deem necessary. When developing a remote work policy that effectively manages those working remote from the UK, there are some key components to keep in mind. Some things to include in a remote work policy should include:
- Eligibility to work remotely
- Work location
- Core working hours
- Privacy and IT security
- Right-to-work entitlements
Location is key
Employers need to know that working remotely doesn’t necessarily mean that an employee is working from the comfort of their own home. Some employees may choose to work from a cafe, a co-working office, or in some cases, abroad. If an employer has employees working remote from the UK, a remote work policy needs to define the rules for where employees can work from.
Employee availability and working hours
A remote work policy should ideally define the expectations related to employee availability and working hours. Setting schedules, regardless of where employees are located, allows for communication during the same hours, which, in turn, can help ensure smooth processes and project management.
Security measures need to be considered
One of the more significant issues that arises with employees working remotely from the UK — or anywhere, for that matter — is dealing with security issues. Even when organizations work on secure networks, security and privacy are not always guaranteed.
If employers do not want their remote employees working on public Wi-Fi, then it should be stated in the remote work policy. If an employer requires the use of a VPN on public networks, then it should be stated in the remote work policy.
Termination guidelines
In a remote work policy, employers need to state that no employee shall be terminated due to working remotely. In some instances, managers may be uncomfortable with having remote employees — simply because they are unable to see what they’re up to and gauge their productivity. This part of the policy is to protect employees from unfair termination.
Question #3: Where is my employer based?
If the employer is based abroad, and the remote employees are in the United Kingdom, it’s necessary that the employer hires compliantly in the UK. They can do this by working with an Employer of Record (EOR).
An EOR in the UK will ensure that hiring, onboarding, and paying remote employees in the United Kingdom is fully compliant with UK labor laws and regulations.
Employers of Record take care of the following:
- Documentation
- Contracts
- Localized benefits
- Vacation, public holidays, and leave allowances
- Social Security contributions and tax obligations
- Paying international employees
With an EOR, employers can focus on connecting with their remote employees — and as a result, manage their remote employees better.
An EOR, like Borderless, can also be used if employers want to engage with an independent contractor in the United Kingdom. Our independent contractor management platform makes it easy to pay contractors in a secure, compliant, and timely manner.
On the other side, independent contractors also have the opportunity to track the status of their invoices, view their past invoices, and check in on their contracts whenever they please.
Keeping time zones in mind
Employers who have employees working remotely in the UK should be mindful of the time difference. Employers who are based in Los Angeles, for example, will need to be mindful of the time difference.
There are two options employers have when working with large time differences: employees can consider asynchronous communication, or, the remote employee must work in the time zone of the employer.
Manage remote team members in the UK with Borderless
Remote employees will have questions for their employers, especially when they work abroad. Many of these questions may have to do with their employment status, classification, management, or ability to hire abroad.
Thankfully, with Borderless, the majority of these questions are answered. Borderless helps employers hire, manage, and pay their international employees and independent contractors compliantly.
With the administrative tasks taken care of, employers can focus on effectively managing their remote team members in the UK and guarantee a positive remote work experience. Learn more about what Borderless can do for you in the United Kingdom.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
