29 October 2019 - Blog, Payroll Tips & Insights
Guide to becoming an employer

When you become an employer there are so many element to ensure you are compliant, paying employees correctly and paying HMRC correctly. We have put together this quick checklist to help you get started.

  1. Know your employees correct employment status as different rules apply to different workers like:
    • Employment rights
    • Employer responsibility
    • How they pay tax and national insurance
    • Benefit entitlements
  2. How to register as an employer even if you are only employing yourself
    • Choosing a payroll system – PAYE, outsourcing or payroll software
    • What else is needed:
      • How much to pay your employees (see our previous article on National Living Wage and National Minimum Wage)
      • Do your employees have a legal right to work in the UK
      • Do you need to have them DBS checked?
      • Have your valid employer insurance in place
      • Have you contracts in place?
      • Do you need to offer a pension?
    • What you need from a new employee
      • Date of Birth
      • Gender
      • Full Address
      • Start date
    • From their P45 you need:
      • Full name
      • Leaving date
      • Total pay and tax paid to date in the current tax year
      • National insurance number
      • Existing tax code
    • If they have not provided a P45:
      • Fill out starter checklist from HMRC website
  1. What to do with this information?
    • Each time you pay an employee you must:
      • Record pay
      • Work out deductions
      • Work out Class 1 National Insurance
      • Give employees their payslip

4. What records do you keep?

  • Pay and deductions
  • Reports and payments to HMRC
  • Leave and sickness absences
  • Tax code notice
  • Taxable expenses and benefits
  • Payroll giving scheme docs – agency contracts and authorisation forms

* These must be kept for 3 years

5. Reports to send to HMRC

  • Full Payment submission (FPS)
  • Employer Payment Submission (EPS)
  • Earlier Year Updates in certain circumstances (EYU)

6. What do you pay HMRC?

  • Every month you pay
    • Tax, national insurance as stated in FPS
    • Minus the reductions on EPS

7. Leaver, sick pay, end of year

  • What if an employee leaves or their circumstance changes?
    • Needs to be reported in the FPS
    • New employees
    • Leavers
    • Started paying pension
    • Changes to address
    • Last report of the tax year
  • Sick or becoming a parent
    • Must pay Statutory sick pay, maternity, paternity, adoption or parental pay
    • Taxed like normal pay

8. Expenses and benefits

  • Examples: cars, health insurance, travel and entertainment expenses, childcare.
  • Different rules apply for different benefits. At the end of the tax year you submit P11D detailing expenses. You do not submit P11D if you have taxed the expenses through payroll

9. End of year

  • Report to HMRC on previous tax year
  • Issue P60’S
  • Prepare for new tax year

Paycheck Plus, Your Payroll Outsourcing Partner

Managing payroll is a complex and time-consuming operation. Keeping up to date with ever evolving legislative changes, ensuring payroll compliance and delivering employee wages accurately and on time takes its toll on a business’ senior resources. Here at Paycheck Plus, we’ve been providing comprehensive payroll services tailored specifically to each of our client’s needs for over a decade. Our payroll specialists handle all aspects of payroll management for our clients including answering our client’s employee queries through our Employee Assist Helpline.

To ensure payroll accuracy or for more information on our payroll services simply request a callback now or call our office on 01614648720. Alternatively, request a quote here.

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