Lizzie Allen explains what a company should consider when hiring a UK-based worker for employment in Germany.

Tax
Whether the employees are German or English, they will be liable to pay German income tax as that’s where they’ll be working. If they were living and working in the UK and paying UK income tax prior to moving to Germany, you would need to apply to HM Revenue & Customs for a ‘no tax’ (NT) code at the start of their employment so they don’t have to pay UK tax (however you can only do this if you know for certain they will be out of the UK for at least an entire tax year, 6 April – 5 April).

Social security
It’s also worth looking into the social security position – if they’re German they should pay German social security contributions (and the company will have to make the relevant German employer social security contributions). If they’re British, they should be able to continue paying into the UK social security system for a number of years but you would need to obtain a Certificate of Continuing Contributions from HMRC.

Contracts
On the employment contract side, it’s also important that they have local German contracts to avoid corporate tax issues – I’m not an expert on this, but I understand that having employees on UK contracts but permanently assigned to another country can open you up to the possibility of the other country levying corporate tax on your company.

Overall
It’s more straightforward if the employees are German, but I would recommend taking specialist international assignment tax and social security advice (any of the big accountancy firms should be able to provide this), particularly if they are British. They can also advise you how much you should be deducting in German taxes/ social security, as a lot of UK payrolls are only set up to calculate tax at UK rates and allowances.

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What happens if I employ someone from the UK to be based full time in Germany?

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