Taking on an Employee

[bigtime]

I am taking on an employee for 16hrs a week and paying £152 per week directly into her bank account. As this is below the tax, employers and employees NI limit do I have to do anything regarding the Inland Revenue or anything else? This is my first ever member of staff and I don't have an accountant as I am a sole trader that completes my tax return online myself.

[rsbmw]

Im not sure she would even be an employee if you don’t have a company, wouldn’t she also be a sole trader and responsible for her own tax etc?

[vaud]

https://www.theaccountancy.co.uk/soletrader/can-yo...

[2 sMoKiN bArReLs]

Yes, you should register with HMRC. And, don't forget your employee liability insurance.

Advice as above, and for example here

https://smallbusiness.co.uk/employing-people-as-a-...

Do some Googling, the info is all out there.

HMRC basic PAYE tools is an adequate payroll/reporting system.

[trickywoo]

As you won’t know what other work they are doing I think you’ll still need to register for PAYE and do the associated payroll even though there won’t be deductions from your employment of them by itself.

You’ll also need employers liability insurance. You’ll also be on the hook to maternity / paternity pay and sick leave.

Not sure if you need to enrol them in a pension of if there are exemptions for low hours / pay.

I’d want to know the benefits of employing someone are really worth it as the trouble can be significant.

[Ham_and_Jam]

rsbmw said:

Im not sure she would even be an employee if you don’t have a company, wouldn’t she also be a sole trader and responsible for her own tax etc?

Er…..no!!

The legal structure of a business has nothing to do with paying your employees.

The employee will be on PAYE.

[essayer]

Register with HMRC as an employer
Use the free software from HMRC - Basic PAYE tools - send EPS/FPS once per month at payday
Have employer’s liability insurance (and put up the certificate/poster!)
Buy in some basic handbooks/policies, there are some law firms that let you buy them off the shelf, they are not expensive

Not sure if you have to think about their pension now?
Good luck!

[Ham_and_Jam]

trickywoo said:

Not sure if you need to enrol them in a pension of if there are exemptions for low hours / pay.

£10k / year is the autoenrol threshold, but employees can legally request to join at £120 / week.

Whilst it unlikely they will join when earning those level of wages it is possible and the extra admin is a bit of a ballache, especially doing it yourself.

[Ham_and_Jam]

essayer said:

Register with HMRC as an employer
Use the free software from HMRC - Basic PAYE tools - send EPS/FPS once per month at payday
Have employer’s liability insurance (and put up the certificate/poster!)
Buy in some basic handbooks/policies, there are some law firms that let you buy them off the shelf, they are not expensive

Not sure if you have to think about their pension now?
Good luck!

I don’t know if the free HMRC software has improved recently, I couldn’t get on with it a few years ago. It was a rubbish UI and overly complicated.

For £70ish per year you can get decent standalone payroll software that does all the calculations (net pay, NI, tax, SSP), integrates with the pension providers, and your bank. Send wage slips, and It will also file weekly RTI reports with HMRC.

For me its £70 well spent and worth it’s weight in gold.

As the business grows you just add in your new employees.

If you use Sage / Quickbooks / Xero they all do payroll as a bolt on, about £5 / employee / month

[2 sMoKiN bArReLs]

Ham_and_Jam said:

I don’t know if the free HMRC software has improved recently,

It really is excellent (for the price!). I run it and all works well.

[essayer]

It definitely hadn’t changed in the last ten years! It’s probably a bit limited if you need to do deductions, expenses etc, but it does the bare minimum.

[bigtime]

Thanks everyone. I've logged into HMRC to register as an employer and received an automated email from them. I'll email my insurance broker asap. She doesn't want to join a pension.

[2 sMoKiN bArReLs]

bigtime said:

Thanks everyone. I've logged into HMRC to register as an employer and received an automated email from them. I'll email my insurance broker asap. She doesn't want to join a pension.

Nice to get the feedback

[Ham_and_Jam]

bigtime said:

Thanks everyone. I've logged into HMRC to register as an employer and received an automated email from them. I'll email my insurance broker asap. She doesn't want to join a pension.

Good luck

[DKL]

bigtime said:

Thanks everyone. I've logged into HMRC to register as an employer and received an automated email from them. I'll email my insurance broker asap. She doesn't want to join a pension.

You don't get a choice about registering them on a pension scheme. If they don't want to be part of it they have to remove themselves once they receive the paperwork. I use NEST, it seems fairly user friendly.

[2 sMoKiN bArReLs]

DKL said:

bigtime said:

Thanks everyone. I've logged into HMRC to register as an employer and received an automated email from them. I'll email my insurance broker asap. She doesn't want to join a pension.

You don't get a choice about registering them on a pension scheme. If they don't want to be part of it they have to remove themselves once they receive the paperwork. I use NEST, it seems fairly user friendly.

Not at the quoted level of pay.

https://www.thepensionsregulator.gov.uk/en/busines...

[Countdown]

2 sMoKiN bArReLs said:

Ham_and_Jam said:

I don’t know if the free HMRC software has improved recently,

It really is excellent (for the price!). I run it and all works well.

Does it print out payslips?

I've been using IRIS basics for a local charity but they keep trying to charge me £85 pa. It would ne good to use the HMRC tool if it's free.

[2 sMoKiN bArReLs]

Countdown said:

2 sMoKiN bArReLs said:

Ham_and_Jam said:

I don’t know if the free HMRC software has improved recently,

It really is excellent (for the price!). I run it and all works well.

Does it print out payslips?

I've been using IRIS basics for a local charity but they keep trying to charge me £85 pa. It would ne good to use the HMRC tool if it's free.

Yes. I've never bothered as the only employees are me & 'er indoors. I can see there is the facility to print a payslip.

[2 sMoKiN bArReLs]

It is "basic" PAYE tools, so really only good for simple gross to net calculations. We aren't pension auto enrolled either.

[DKL]

2 sMoKiN bArReLs said:

Not at the quoted level of pay.

https://www.thepensionsregulator.gov.uk/en/busines...

Yes, that does assume they reach the qualification amount or (not in this case) they request it.