How to manage a remote workforce in the UK: Legal and HR best practices

Remote work has transformed the way businesses hire and operate across borders. What began as a temporary adjustment during the pandemic has now become a lasting strategy for international growth. Today, companies of all sizes are building distributed teams, and the UK has emerged as a top location for remote talent.

The UK offers attractive conditions for international employers with its time zone compatibility, skilled English-speaking workforce, and well-established employment laws. However, managing a remote workforce in the UK requires a solid understanding of local labour law, payroll regulations, HR policies, and data protection requirements.

This guide provides clear and practical advice for managing UK-based remote employees legally and effectively. Whether you’re hiring your first team member in the UK or scaling an entire remote department, here’s what you need to know to stay compliant, and how a British Employer of Record can help you do it without setting up a legal entity.

Legal obligations when managing a UK-based remote workforce

Hiring remote talent in the UK creates the same employer responsibilities as hiring in-office staff. Whether your business is based in the US, Europe, or elsewhere, you must comply with UK employment law once you engage a worker living in the UK.

This starts with providing a written employment contract, which must be given to the employee on or before their first day of work. The contract should include key details such as job title, hours, pay, benefits, notice periods, and more.

You also need to conduct right to work checks to verify that the person is legally allowed to work in the UK. Failing to do this properly can result in serious fines, even for remote hires.

It’s also essential to classify your workers correctly. In the UK, employment status determines which rights and protections apply. Misclassifying a remote employee as an independent contractor—especially if they’re working full-time under your control—can lead to tax liabilities, back pay claims, and legal action.

Payroll, taxes, and social security

Employers with UK-based remote workers must register with HMRC (His Majesty’s Revenue & Customs) to operate the Pay As You Earn (PAYE) system. This involves deducting income tax and National Insurance contributions (NICs) from employee wages and remitting them to HMRC on a regular basis.

As the employer, you’re also responsible for paying employer NICs and submitting Real Time Information (RTI) reports to HMRC every time you process payroll.

For international businesses, another consideration is the employee’s tax residency status. In most cases, someone living and working remotely in the UK is considered a UK tax resident, even if the employer is based abroad. This means their income must be taxed in the UK and entitled to UK employment protections and statutory benefits.

Pension auto-enrolment and mandatory benefits

UK law requires that eligible employees are automatically enrolled in a workplace pension scheme. If your remote worker is between 22 and the state pension age and earns over £10,000 annually, you must:

• Enrol them in a pension plan,
• Contribute a minimum of 3% of qualifying earnings,
• Manage opt-outs and re-enrolment every three years.

Other statutory benefits include:

• Paid annual leave (at least 28 days including public holidays),
• Statutory sick pay,
• Maternity, paternity, and parental leave.

All of these must be accounted for in payroll and included in your employment policies—even if the person works from their kitchen table.

Remote work policies and employment conditions

Creating a clear remote work policy is essential for managing distributed teams in the UK. This document should outline expectations for communication, working hours, data handling, equipment use, and expense reimbursement.

Under the UK Health and Safety at Work Act, employers are responsible for the health and safety of remote workers. That means conducting a risk assessment, ensuring the home work environment is safe, and providing necessary tools or ergonomic support.

Data protection is another priority. UK GDPR rules apply to employee data just as they would in an office setting. Employers must handle personal data lawfully, store it securely, and be transparent about how it’s used.

Remote employees must also be given information about rest breaks, maximum working hours (48 hours per week unless opted out), and access to policies like grievance and disciplinary procedures.

HR best practices for managing a remote team in the UK

Legal compliance is the foundation, but effective remote team management goes beyond contracts and tax filings.

• Start with clear communication channels. Regular check-ins, team meetings, and asynchronous tools keep everyone aligned. Trust is key in remote settings, so focus on outcomes rather than constant supervision.
• UK work culture values direct communication, reliability, and work-life balance. Encourage flexibility, but also define expectations around responsiveness and availability, especially if your core operations are in another time zone.
• Don’t overlook mental health and well-being. Remote workers can feel isolated if not supported. Consider offering access to counselling services, wellness stipends, or simply encouraging breaks and social interaction.
• And of course, use structured performance management systems to support growth and accountability, just as you would with office-based employees.

How British Employer of Record can help you hire and manage a UK-based remote workforce

Hiring remote workers directly can be complicated and time-consuming if your company doesn’t have a UK entity. That’s where a British Employer of Record (EOR) comes in.

A British EOR legally employs the worker on your behalf. While you manage the person’s day-to-day responsibilities, the EOR takes care of all the legal and administrative obligations.

This includes:

• Drafting a compliant UK employment contract,
• Conducting right to work checks,
• Registering with HMRC and handling PAYE and NICs,
• Managing pension auto-enrolment and statutory benefits,
• Providing support for payroll, onboarding, and HR policies.

With an EOR, you can hire in the UK within days instead of weeks or months. There’s no need to set up a local entity, deal with tax registration, or build internal compliance expertise from scratch.

For example, a growing software company based in Germany wanted to hire a customer support specialist in the UK. However, they didn’t have a UK legal entity and weren’t familiar with local employment laws, payroll taxes, or right-to-work checks.

By partnering with a British Employer of Record, the company was able to employ the UK-based worker within days legally. The EOR handled the employment contract, tax registration, payroll, and statutory benefits, ensuring full compliance with UK regulations. This allowed the company to focus on scaling its support operations without getting bogged down in legal or administrative processes.

This model is especially beneficial for:

• Startups or SMEs testing the UK market,
• Companies hiring just one or two remote employees,
• Organisations expanding globally but not ready to invest in a UK subsidiary,
• Businesses seeking to reduce legal and payroll risk while ensuring full compliance.

Manage a remote team with ease

The UK is a fantastic destination for hiring remote talent, but it comes with specific legal and HR responsibilities. From issuing compliant contracts and managing payroll to supporting health, safety, and wellbeing, managing a remote workforce in the UK requires more than just strong Wi-Fi.

If your business doesn’t have a local entity, a British Employer of Record offers a fast and compliant way to hire and manage remote employees with full peace of mind. It’s a scalable, low-risk solution that allows you to build a UK presence without bureaucracy.

Speak to our team about managing your remote workforce in the UK – quickly and compliantly. We’ll help you get started the right way.