Employer Registration £45.00
You normally need to register as an employer with HM Revenue and Customs (HMRC) when you start employing staff, or using subcontractors for construction work.
You normally need to register as an employer with HM Revenue and Customs (HMRC) when you start employing staff, or using subcontractors for construction work. You must register if you’re employing yourself, eg as the only director of a limited company.
You must register before the first payday. It can take up to 2 weeks. You can’t register more than 2 months before you start paying people. If you need to register you can do so up to four weeks in advance of your first pay day.
When you take on an employee for the first time, you normally need to register as an employer with HM Revenue & Customs (HMRC). So the first thing to do is check whether you need to register. If you do need to register, it's always best to do so as soon as possible. You can register up to four weeks before your employee's first pay day.
You don't necessarily need to register as an employer once you take someone on. Check first that at least one of the following conditions applies to you. If any apply, then you need to register:
- the employee already has another job
- they are receiving a state or occupational pension
- you're paying them at or above the PAYE threshold
- you're paying them at or above the National Insurance lower earnings level
- you're providing them with employee benefits
As an employer, you normally have to operate PAYE as part of your payroll. PAYE is HM Revenue and Customs’ (HMRC) system to collect Income Tax and National Insurance from employment. You’re exempt from PAYE if none of your employees is paid £112 or more a week, gets expenses and benefits, has another job or gets a pension. However, you must keep payroll records. If you run payroll yourself, you’ll need to report your employees’ payments and deductions to HMRC on or before each payday.
Your payroll software will work out how much tax and National Insurance you owe, including an employer’s National Insurance contribution on each employee’s earnings above £155 a week. You’ll need to send another report to claim any reduction on what you owe HMRC, eg for statutory pay.
All employers will have to provide workers with a workplace pension scheme by law over the next few years. This is called ‘automatic enrolment’. When your business must start doing this (known as a ‘staging date’) depends on how many people you have on your payroll. Check your staging date with The Pensions Regulator.
You must set up a workplace pension scheme before your staging date, if you don’t already offer one. If you already have a workplace pension scheme, check if you can use it for 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 make an employer’s contribution to the pension scheme for those workers.
Paye & CIS (Construction Industry Scheme)
Every employer normally has to operate PAYE as part of his/her payroll. PAYE is HM Revenue and Customs’ (HMRC) system to collect Income Tax and National Insurance from employment. When paying your employees through payroll you also need to make deductions for PAYE.
Payments to your employees include their salary or wages, as well as things like any tips or bonuses, or statutory sick or maternity pay or holidays.
From these payments, you will need to deduct tax and National Insurance for most employees. Other deductions you may need to make include student loan repayments or pension contributions. You are exempt from PAYE if none of your employees is paid £112 or more a week, gets expenses and benefits, has another job or gets a pension. However, you must keep payroll records.
It's a fact of business—if a company has employees, it has to account for payroll and fringe benefits which include items such as:
- Bonuses & Commissions to Employees
- Overtime Pay
- Payroll Taxes and Costs
- Social Security
- Federal Income Tax
- State Income Tax
- State Unemployment Tax
- Federal Unemployment Tax
- Worker Compensation Insurance
- Employer Paid Benefits
- Sick Days
- Insurance (Health, Dental, Vision, Life, Disability)
- Retirement Plans
- Profit-Sharing Plans
Administering your payroll can be time consuming, diverting energy and resources from the core activities of your business. ABS Service Accountancy & Bookkeeping Ltd can provide a comprehensive and confidential payroll service. Even if you have only a few employees, you will make savings by engaging us to administer your payroll.
Contractor Under CIS (Construction Industry Scheme)
The Construction Industry Scheme (CIS) applies to contractors, subcontractors and any organisations that have a high annual spend on construction, even if their main work isn't in the industry.
You’ll need to file monthly returns and keep full CIS records - you may get a penalty if you don’t. When you pay to a subcontractor you’ll normally make deductions at the standard rate of 20%.
Contractors will make deductions at a higher rate of 30% if:
- Self employed person is not registered under CIS
- You can’t verify your subcontractors