First Time Employer

8/12/2019 First Time Employer

1/3 TH FS3 Page 1 HMRC 08/13

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Tax help series

Employing someone for thefirst time what you needto knowEmploying someone is an important decision. If you take on an employee for thefirst time you may need to register as an employer with HM Revenue & Customs(HMRC) and set up and run a PAYE (Pay As You Earn) scheme.

Here we tell you: what an employers PAYE responsibilities are who counts as an employee

how to register where to get more help and guidance.

You dont need to be in business to be an employer. If you employ domestic stafflike nannies, cooks or housekeepers in your home you may be treated as theiremployer.

Employers responsibilitiesOnce you become an employer, you are responsible for: calculating and deducting PAYE tax and National Insurance contributions (NICs)

from your employees pay each pay period (for example, weekly or monthly) paying Employer Class 1 NICs paying HMRC on time making statutory payments, such as Statutory Sick Pay and Statutory

Maternity Pay making Student Loan deductions keeping accurate and up to date records sending your PAYE information to HMRC online each time you pay your

employees, on or before the time that you pay them.

Who counts as an employee An employee can be: full-time part-time a casual worker a director.

It is very important youre sure about whether the people who work for you are your employees or whether theyre self-employed. This is because it affects theway their tax and NICs are calculated and whether or not you have to operatePAYE. Its your responsibility to get this right. You can find out more and access theinteractive employment status indicator too at hmrc.gov.uk/payerti/ employee-starting/status.htm or you can phone the New Employer Helplineon 0300 200 3211 for advice.

Customers withparticular needsIf you need help, please let us know.

For example, if: English is not your first language you would like us to use a certain

format to communicate with you,for example, Braille or Text Relay

you would like us to visit you athome because it is difficult for you toget to one of our offices.

For more information go to hmrc.gov.uk/contactus/particular-needs.htm

Welsh Language ServiceGwasanaeth CymraegOs ydych am gysylltu ni drwygyfrwng y Gymraeg gallwch naill ai: mynd in gwefan yn hmrc.gov.uk/

cymraeg/cymraeg-rti.htm ffonior Ganolfan Gyswllt Gymraeg

ar 0300 200 1900 .

Your rights and obligationsYour Charter explains what you can

expect from us and what we expectfrom you. For more information go to hmrc.gov.uk/charter
http://www.hmrc.gov.uk/contactus/particular-needs.htmhttp://www.hmrc.gov.uk/cymraeg/cymraeg-rti.htmhttp://www.hmrc.gov.uk/cymraeg/cymraeg-rti.htmhttp://www.hmrc.gov.uk/payerti/employee-starting/status.htmhttp://www.hmrc.gov.uk/payerti/employee-starting/status.htmhttp://www.hmrc.gov.uk/contactus/particular-needs.htmhttp://www.hmrc.gov.uk/contactus/particular-needs.htmhttp://www.hmrc.gov.uk/cymraeg/cymraeg-rti.htmhttp://www.hmrc.gov.uk/cymraeg/cymraeg-rti.htmhttp://www.hmrc.gov.uk/charterhttp://www.hmrc.gov.uk/charterhttp://www.hmrc.gov.uk/cymraeg/cymraeg-rti.htmhttp://www.hmrc.gov.uk/cymraeg/cymraeg-rti.htmhttp://www.hmrc.gov.uk/contactus/particular-needs.htmhttp://www.hmrc.gov.uk/contactus/particular-needs.htmhttp://www.hmrc.gov.uk/payerti/employee-starting/status.htmhttp://www.hmrc.gov.uk/payerti/employee-starting/status.htm



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National Minimum Wage The law says that you must pay your workers at least the National Minimum Wage(NMW) rates. For more information, go to gov.uk/national-minimum-wage orphone the Pay and Work Rights Helpline on 0800 917 2368 .

Workers from abroadBefore you take on an employee you will need to check that they are eligible towork in this country. For more information, go to hmrc.gov.uk/payerti/employee-starting/new-employee.htm

Registering with HMRC To find out whether you need to register as an employer, go to hmrc.gov.uk/ payerti/getting-started/register.htm

To tell HMRC you have started in business, taken on an employee for the firsttime or if you need to register for VAT, you can use HMRCs online tax registrationservice. Go to online.hmrc.gov.uk/registration/options

The service allows you to register for the following business taxes. Self Assessment. PAYE. Corporation Tax. Value Added Tax (VAT).

Once you have enrolled to use either HMRCs Corporation Tax or Self Assessmentonline service you can set up a Business Tax Dashboard. You can use yourdashboard to see the tax position for your business across different business taxesas it brings together information from your HMRC online services.

If you have asked someone else to do your payroll for you, youll need to tell ustheir name, address and contact details.

Setting up your payroll As the employer, you are responsible for your payroll.

If you run your own payroll system, you need payroll software that is ready forReal Time Information (RTI) in order to send your PAYE information to HMRC online,every time you pay an employee. You can do this in three ways.1. Use commercial payroll software.2. Use a payroll service provider, such as an accountant or a payroll bureau,

who will do it for you.3. If you employ nine or fewer people, you can use one of the free payroll software

packages or HMRCs free Basic PAYE Tool.

Go to hmrc.gov.uk/payerti/getting-started/payroll-system.htm

Doing it online You must report certain payroll information online to HMRC each time you pay your employees. You have to be enrolled with PAYE Online before you can do that so you should enrol as soon as you can.

If you register using the online tax registration service, youll also be automaticallyenrolled for PAYE Online for employers. You will still have to activate it using an

Activation Code (also known as an Activation Pin) which we will send you. It maytake up to ten days to arrive.

We have a range of servicesfor people with disabilities,including guidance inBraille, audio and largeprint. Most of our forms arealso available in large print.Please contact us on anyof our phone helplines if

you need these services.

These notes are for guidance only andreflect the position at the time of writing.

They do not affect any right of appeal.

HMRC Digital ServiceMonth 2012 Crown copyright 2013

Software packages and otherpayroll optionsIf you employ anyone, even if its only

yourself (as a director), then yourpayroll is an essential part of running

your business.

To help you make the right choicewhen deciding on a payroll system orprovider, go to hmrc.gov.uk/payerti/getting-started/payroll-system.htm
http://www.hmrc.gov.uk/payerti/getting-started/payroll-system.htmhttp://www.hmrc.gov.uk/payerti/getting-started/payroll-system.htmhttp://www.gov.uk/national-minimum-wagehttp://www.hmrc.gov.uk/payerti/employee-starting/new-employee.htmhttp://www.hmrc.gov.uk/payerti/employee-starting/new-employee.htmhttp://www.hmrc.gov.uk/payerti/getting-started/register.htmhttp://www.hmrc.gov.uk/payerti/getting-started/register.htmhttp://localhost/var/www/apps/conversion/tmp/scratch_8/online.hmrc.gov.uk/registration/optionshttp://www.hmrc.gov.uk/payerti/getting-started/payroll-system.htmhttp://www.hmrc.gov.uk/payerti/getting-started/payroll-system.htmhttp://www.hmrc.gov.uk/payerti/getting-started/payroll-system.htmhttp://www.hmrc.gov.uk/payerti/getting-started/payroll-system.htmhttp://www.hmrc.gov.uk/payerti/getting-started/payroll-system.htmhttp://www.hmrc.gov.uk/payerti/getting-started/payroll-system.htmhttp://localhost/var/www/apps/conversion/tmp/scratch_8/online.hmrc.gov.uk/registration/optionshttp://www.hmrc.gov.uk/payerti/getting-started/register.htmhttp://www.hmrc.gov.uk/payerti/getting-started/register.htmhttp://www.hmrc.gov.uk/payerti/employee-starting/new-employee.htmhttp://www.hmrc.gov.uk/payerti/employee-starting/new-employee.htmhttp://www.gov.uk/national-minimum-wage



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We have a range of servicesfor people with disabilities,including guidance inBraille, audio and largeprint. Most of our forms arealso available in large print.Please contact us on anyof our phone helplines if

you need these services.



HMRC Digital ServiceMonth 2012 Crown copyright 2013

For more helpInternetGo to hmrc .gov.uk/payerti/getting-started-more/index.htm to find: the New employer getting started

section for new employers

advice on setting up and operating your payroll links to key PAYE forms, tools

and publications.

Go to gov.uk/employing-staff to findgeneral guidance on what you need todo as an employer.

Employer BulletinHMRC publishes this three times a

year. It brings you the latest employerand payroll news. Go to hmrc.gov.uk/

payerti/forms-updates/employer-bulletin

New Employer Helpline The New Employer Helpline,0300 200 3211, is especially for newor inexperienced employers. It is openfrom 8am to 8pm, Monday to Friday,and from 8am to 4pm Saturday.

Online presentations andvideos to help you

There is a range of products and

services, including online presentations(webinars) and e-learning, to help youunderstand the different aspects ofstarting a business. Go to hmrc.gov.uk/ startingup/help-support.htm to see the range of help andsupport available.

You will also find lots of bite-sizedtax information videos on HMRCs

YouTube pages. Go to youtube.com/ user/HMRCgovuk

If you registered by a method other than the online tax registration service, suchas the online email form, you will need to wait for your PAYE reference number toarrive before enrolling for PAYE Online for employers yourself.

For full details, go to hmrc.gov.uk/payerti/getting-started/register.htm

Paying HMRC You are responsible for calculating and deducting PAYE tax and NICs from youremployees pay. There are monthly deadlines for paying these deductions toHMRC, as well as any Student Loan repayments or tax deducted from paymentsto subcontractors. We recommend that you pay electronically. You can get moreinformation at hmrc.gov.uk/payinghmrc/paye.htm

Keeping on top of deadlinesEach tax year starts on 6 April in one year and ends on 5 April the following year.

There is a regular cycle of filing returns and making payments to HMRC. To accessthe monthly employer diary, go to hmrc.gov.uk/employers and under quick linksselect Employer Diary .

Dispensations To save you time and money by reducing your reporting requirements forcertain expenses and benefits that you pay to your employees, you can applyfor a dispensation.

To find out about the kinds of expenses and benefits that you can include in adispensation and how you go about applying for one, go to hmrc.gov.uk/payerti/

exb/schemes/dispensation.htm



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Documents

First Time Employer