You are running a business and need staff. You may wish to employee staff, instruct self employed individuals or have a mixture of both. The decision is really up to you and the needs of the business. However, as a business owner, you need to be aware of the rules around employing people. Further, you will want to ensure that contracts of employment are in place as well as adhering to Health & Safety or other compliance areas specific to your business or industry.
From an accounting and tax perspective, as a business employing staff, you will need to register as an employer. Once registered, you will have to process payroll in real time. This means that every time you pay your staff, this information has to be reported at the same time. Real Time Information (RTI) has been in operation since 2013 and allows HMRC to know payroll information such as new staff, leavers, what someone has been paid and what the business needs to be pay. This information also allows HMRC to update businesses timely to use the right information such as tax codes and providing missing national insurance numbers.
Payroll processing will be carried out a frequency determined by the business – it can be weekly, fortnightly, monthly or another frequency. A business may operate more than one frequency for example, weekly hourly paid staff and monthly salaried staff.
As an employer, there are duties around payroll period processing, new starters, leavers, providing payslips and all businesses will have to consider auto-enrolment duties too. Businesses need to assess its workforce (and regularly) to ensure that they are compliant with any duties to enrol workers into workplace pensions and to make contributions. Currently the minimum contributions are 3% for the employer and 5% for the employee.
For advice and assistance in becoming an employer or fulfilling your duties as an employer, contact us for a free consultation!