The first point to consider is if you have a permanent establishment in UK and hence may create a taxable presence.
Technically he is probably an employee hence two options - the employee should register and pay NI and Tax through the Direct Payment Scheme (DPNI). There is an employer scheme but that is or National Insurance only
If you have a presence in the UK then you would formally register as an employer and run the payroll and deduct NI/Tax
Thank you for your reply.
Actually, our Cyprus company rents an office in London and the UK sales manager has his own UK LTD and runs our sales business in the UK by using the office. Our Cyprus company pays his LTD company for his sales services.
He mentioned that he would have issues with HMRC because he has worked for us on a full-time basis and they could consider him as an employee, not as a contractor.
Now we are trying to figure out how to help him and if it is possible to take him on our Cyprus company payroll
without registering our tax presence in the UK and paying taxes instead of him. We would like to pay him Gross as we are doing now.
Plus, we were advised there would be no problem with the HMRC if our UK salesperson processes 95% of his LTD company income as salary and as long as he sticks to the IR35 rules he would be fine. Could it really work in the case?