Do you need to register as an employer?

You normally need to register as an employer with HMRC when you start employing staff or using subcontractors for construction work.
You must register even if you’re only employing yourself, for example, as the only director of a limited Company.

Do you need to pay someone through PAYE?
Employers usually have to pay employees through PAYE if they earn £533 or more a month (£123 a week or £6,396 a year).
The minimum wage a worker should get depends on their age and if they’re an apprentice. Each time you pay your staff (including new starters), you must monitor their age and earnings to ensure you as an employer are complying with National Minimum Wage Legislation.

Do you have an Auto Enrolment Pension Scheme?
Under the Pensions Act 2008, every employer in the UK must have a registered pension scheme whether or not their employees make pension contributions or not. This is called ‘automatic enrolment’.
As an employer your must have an automatic enrolment pension scheme, if all of the following conditions are met:
• You have at least one employee
• The employee is aged between 22 and Sate Pension Age
• The employee earnings at least £10,000 per year
• The employee usually works in the UK.

Even if you employee 10 people and only one person meets the criteria above you must have a registered pension scheme.

There is no requirement to pay self-employed workers through PAYE.

As a general rule, HMRC guidance states that someone is:
• Employed if they work for you and do not have any of the risks associated with running a business.
• Self-employed if they run their own business and are responsible for its success of failure.

You must check each worker’s employment status to make sure they’re not self-employed. If you get it wrong you may have to pay extra tax, National Insurance, interest and a penalty.

Employers that take on a new employees will need a starter declaration completed to work out the correct tax code at which the employees will be allocated. Incorrect tax codes can led to the new employee paying more tax than is due.

For support with processing payroll please contact Anna at PGR Accountants.