I had a quick look at the HMRC website to see if I could garner some useful tips for you when you do decide you’re ready to take on your first employee and here’s what I came up with.
First things first
Is your potential employee legally allowed to work for you? Are they allowed employment in the UK?
You need to collect information from them so that this can be passed onto HMRC on or before the first payday. But even before you get that far you have to set yourself up with HMRC as an employer and you will need to set up a PAYE (pay as you earn) scheme.
Registering as an employer
To register as an employer you’ll need a certain amount of information to send to HMRC.
You will need
• your name (that one should be easy)
• The business name
• Your business partner’s name (if you have one)
• The company name (if this is different)
• Business or home address, including postcode
• Business or home telephone number and other contact phone numbers
• Contact email address
• Who to send correspondence to
• The date of the first payday
You may need other information depending on the type of business that you are registering so be prepared.
How do you register as an employer with HMRC?
If you can do so, registering online is usually the most effective and straightforward way – although some employers may struggle with this. Follow the step by step process within the online tax registration service.
It’s made easy for you because you can register as an employer and enrol for the PAYE Online service in just one visit and there are links to click that will give you help if you don’t understand what you’re doing.
HMRC note that “if you have previously registered for Self Assessment Online as an individual, and you want to keep the same User ID and password to register as an employer, you will need to ‘de-enrol’ from Self Assessment and then ‘re-enrol’ by choosing Self Assessment from the group of services under the heading ‘Organisations’.”
Once you have successfully completed the details then you can sit back and wait for your letter from HMRC containing an Activation Code that you need to use in order to activate the PAYE Online service the first time you access it. This will all be explained to you.
For an online demonstration of the registration process HMRC have this handy archived guide that you can access here
Register in plenty of time
It is important not to leave registering until the last minute because
• if you can’t use the online tax registration service you are going to have to find another way to do it
• you might have to wait a week for your PAYE and Accounts Office reference numbers to arrive
• it takes up to a week for your Activation Code for PAYE Online to arrive
• you must have a payroll system set up ready to report your payroll information online to HMRC on or before the first payday of your new employee
Taking on temporary or casual workers
You have to do all of the above even for temporary or casual employees as you do for permanent employees.
I think the main thing is that you don’t put off registering just because the process seems onerous or difficult. It isn’t as bad as it sounds and there is plenty of help available to get you through the process.
And it’ll be worth it in the end. Everyone who ever started a successful business had to take the plunge and take on a new employee at some stage. This is the start of your success!
How was it for you?
How did you find taking on a new employee? Was it a rigmarole or straightforward? What tips would you offer would be employers as they take on their first new employee? How did you feel having someone else help you out with your ‘baby’? Let us know below or pop over and see us on our Facebook page. Find us here