Registering as an employerUnless 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 insuranceAs 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 National InsuranceIf your employee?s total salary is above the Employer’s National equivalent of ?156 per week, you will have to start paying employer?s National Insurance to HMRC. As of 6 April 2015, you won?t have to pay employer?s National Insurance on the wages of any staff members who are under 21, unless you pay them more than ?827 per week. You may be able to reduce your employer?s National Insurance bill through the Employment Allowance, which the government introduced on 6 April 2014 and increased on 6 April 2016. The Employment Allowance reduces the amount of employer?s National Insurance by ?3,000 a year for many employers, but companies employing only their directors are not allowed to claim it. Don’t miss the next instalments in?our definitive guide to hiring your first staff member:
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