There are a myriad of rules that new businesses must follow when they start employing staff for the first time. A full examination of the rules is beyond the scope of this article however we wanted to point out some important issues to be aware of when taking on staff. This includes ensuring that you register as an employer with HMRC. This must be done before the first payday and this process must even be completed by directors of a limited company who employ themselves to work in their company.
There is no requirement to register as an employer in the unlikely event that none of your employees are paid more than £113 a week, don’t receive any expenses or benefits and don’t have another job or receive a pension. However, even if this was the case you are still required to keep payroll records.
Setting up payroll for the first time can be very complex and we are here to help. As a general rule you have the choice between using a payroll provider or running your payroll yourself. If you decide to run your own payroll you must choose suitable payroll software.
HMRC also needs to be sent information about tax and other deductions from employees’ pay when the employee is paid. This is done using the Real Time Information (RTI) system which involves employers sending HMRC information each tax month. Tax months run from the 6th of one month to the 5th of the next.
You must also ensure that you are complying with the minimum wage legislation, check that any new employees have the legal right to work in the UK and be aware that you may be required to offer a workplace pension scheme.