According to the tax office there are six things you need to consider when you are employing staff for the first time. They are:
1. Decide how much to pay someone - you must pay your employee at least the National Minimum Wage.
2. Check if someone has the legal right to work in the UK. You may have to do other employment checks as well.
3. Apply for a DBS check (formerly known as a CRB check) if you work in a field that requires one, e.g. with vulnerable people or security.
4. Get employment insurance - you need employers’ liability insurance as soon as you become an employer.
5. Send details of the job (including terms and conditions) in writing to your employee. You need to give your employee a written statement of employment if you’re employing someone for more than 1 month.
6. Tell HMRC by registering as an employer - you can do this up to 4 weeks before you pay your new staff.
If your employee earns less than £111 a week and they don't have another job elsewhere - or other taxable income such as a pension - you don't have to register with HMRC as an employer. It would be prudent to keep a record of the wages you pay.
As soon as their income exceeds £111 a week you will need to deduct PAYE, and if necessary National Insurance.
The good news is we offer an outsourced payroll service. So if you are unsure if you should or should not be registered with HMRC, give us a call so we can discuss your obligations in more detail.