Employers Guide

If you are a new employer setting up your first company, it can be difficult to understand HMRC processes alongside everything else. This guide will explain everything from registering your company to setting up a pension scheme and paying maternity allowance.

Registering your company

You can register a company online if it is a private company limited by shares and the name doesn’t contain a word that you need permission to use. It usually takes around 24 hours and costs £15. You will need the company’s name and address, the names and addresses of shareholders and details of shareholders and capital. You can use form IN01 to register with different types of limited companies.

Employing staff Small-Employer-Hiring-Sign

There are seven things you need to do when employing someone for the first time:

  • Decide how much to pay them- you must pay at least the National Minimum wage.
  • Check if someone has a legal right to work in the UK.
  • Check if you need to get a DBS check.
  • Get employment insurance.
  • Send details of the job to your employee.
  • Register as an employer with HMRC.
  • Check if you need to automatically enrol your staff into an automatic pension scheme.

Register as an employer

You must register as an employer before the first payday- it can take up to 2 weeks. You cannot register more than 2 months before you start paying people.

Introduction to using PAYE

When you are an employer, you have to operate PAYE as part of your payroll. PAYE is a system which is used to collect income tax and National Insurance contributions from your employees. If you run your payroll yourself, you will need to report yourself and your employees payments’ and deductions to HMRC on or before every payday. Your payroll software should work out how much tax you owe, including an employer’s National Insurance contribution on each employee’s earnings over £155 a week.

Student loan repayments

You should make student loan deductions if any of the following apply: your employee’s p45 shows that deductions should continue or if HMRC send you form SL1 and your employee earns more than £17,355 a year.

Pensions Employer_Support-copy

Over the next few years, all employers will have to provide employees with a workplace pension scheme- this is called automatic enrolment. You must enrol all workers who:

  • Are aged between 22 and the State Pension age.
  • Earn at least £10,000 a year.
  • Work in the UK.

You must also make an employer’s contribution to the scheme for the workers. You must pay any pension contributions you take from your employees pension scheme by the date you have agreed with your provider.

Statutory Sick Pay/Maternity Allowance

Your employees may be eligible to get Statutory Sick Pay (£88.45 a week) for 28 weeks. You can offer more if you set up a company sick pay scheme.

Statutory maternity pay is available when an employee takes time off to have a baby. Your employee should also get 52 weeks off.