Expanding your team? Congratulations! But before welcoming your new employee, ensure you meet your HMRC obligations. This quick guide outlines the essential steps to stay compliant, demonstrating your commitment to responsible business practices.
Essential Steps for HMRC Compliance. 1. Right to Work Checks: Verify your employee's legal right to work in the UK. Use the government's right-to-work checking tool (https://www.gov.uk/check-job-applicant-right-to-work) and keep copies of the documents used for verification. 2. Register with HMRC (if not already): If you're a new employer, register with HMRC at least four weeks before your first employee's payday (https://www.gov.uk/register-employer).
3. The Starter Checklist: This replaces the P46 form and helps determine your employee's tax code. Download the latest version from HMRC (https://www.gov.uk/guidance/starter-checklist-for-paye) and have it completed before their first paycheck.
After this, your new employee is ready to be set up for payroll, which Short and Sons will be able to handle for you and maintain every month, provided we have the required information (from the starter checklist) and monthly payment details. PAYE Tax Tips
Here are some key tips that we think are important in avoiding the pitfalls of hiring someone new. Firstly, add your employer PAYE account to your government gateway. This will allow you to see how much income tax and National insurance is owed to HMRC for PAYE. To do this, visit https://www.gov.uk/log-in-register-hmrc-online-services.
If you have followed the above tip and know how much tax you need to pay on your employees behalf, we recommend setting up a direct debit. Setting up a direct debit will reduce your workload and help you avoid making late payments, which can result in fines and interest being charged on the amount due.
Hiring new staff can be exciting, but navigating HMRC regulations can be complex. We want to guide you through such processes and make taking on new employees hassle-free. If you're going to take on staff and need an accountant who can help you do so, contact us today!