HR · 28 March 2017

Definitive guide to hiring your first member of staff: Registration and insurance

Guide to hiring
Since 2015, you no longer have to pay employer’s National Insurance on the wages of any staff members who are under 21
There are a whole host of different things you need to think about when you become an employer. Among other responsibilities, youll have to comply with tax legislation and employment law, and report to HMRC how much you pay your staff and deduct from their salary.

Over the course of this guide, well be outlining the key procedures that youll need to follow to ensure a smooth transition into employerhood. First up is everything you need to know about registering new staff and your insurance responsibilities as an employer, before we take a look at the relevant aspects of employment law. Finally, we will guide you through benefits and salaries.

Registering as an employer

Unless you’re going to pay all your employees less than the Lower Earnings Limit for National Insurance (£112 per week), you must register as an employer with HMRC before you take on any members of staff.

If your business is a limited company and you’re taking a salary, you may well have already registered the company as an employer. If this is the case, you won’t need to register again when you take on your first employee.

Employer’s liability insurance

As an employer, you are likely to have a legal requirement to have employer’s liability insurance. However, you may not need this if:

  • You only employ a family member
  • You employ someone who is based abroad (a few restrictions apply to this rule and your insurance provider will be able to advise you of these)
Employer’s liability insurance covers you if an employee makes a compensation claim for injury or illness that they attribute to the working environment.

If you’re legally obliged to have an employer’s liability policy, you could be fined up to 2, 500 for each day that you are without one. To find out more, check out the advice from gov.uk.


 
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ABOUT THE EXPERT

Emily Coltman is chief accountant to FreeAgent, provider of cloud accounting software for freelancers, micro businesses and accountants. She is passionate about helping the owners of small and growing businesses to escape their ?fear of the numbers? and she translates small business finance and tax into practical common sense speak.

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