HMRC provides extensive guidance for employers on various aspects of running payroll and fulfilling their obligations. This includes registering as an employer, reporting payroll information (FPS and EPS), paying PAYE and National Insurance, and handling expenses and benefits for employees. Employers need to register with HMRC before their first payday and use payroll software to calculate and report pay and deductions.
Here’s a breakdown of key areas:
- Registration:
- Employers must register with HMRC before their first payday.
- This applies even if employing only yourself as a director of a limited company.
- Registration is required even if using subcontractors for construction work.
- Payroll Reporting (PAYE):
- Employers must report payroll information, including pay, deductions, and benefits, through a Full Payment Submission (FPS) on or before each payday.
- An Employer Payment Summary (EPS) is submitted to report reductions in what’s owed, such as for statutory pay.
- If no employees are paid in a tax month, an EPS is submitted instead of an FPS.
- Paying HMRC:
- Employers are responsible for deducting PAYE (Pay As You Earn) tax and National Insurance from employee wages.
- They must also pay employer’s National Insurance contributions.
- HMRC provides guidance on how to pay via various methods, including direct debit.
- Expenses and Benefits:
- Employers must report taxable expenses and benefits provided to employees, either through payroll or at the end of the tax year.
- They also need to report and pay Class 1A National Insurance on these expenses and benefits.
- Key Documents and Resources:
- PAYE Online: HMRC’s online service for employers to submit returns and forms.
- Employer Bulletin: A bi-monthly magazine from HMRC with updates and guidance.
- HMRC Webinars: Offers overviews of payroll changes for each tax year.
- CWG2: Further guide to PAYE and National Insurance contributions.
- Specific Guidance:
- Right to Work Checks: Employers have a guide on verifying employee’s right to work in the UK.
- Cycle to Work Scheme: Guidance is available for employers setting up and administering cycle to work schemes.
- Workplace Pensions: The Pensions Regulator provides information for new employers regarding auto-enrolment duties.
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