I am about to take on my first employee in the UK. What do I need to do?

I am about to take on my first employee in the UK. What do I need to do?

Consulting quantity surveyor asks:

I am about to take on my first employee for my UK business. What do I need to know and do?

Acumenica answers:

Taking on your first employee in the UK is an exciting milestone for any business. To ensure a smooth process, here are the key steps you need to follow:

  • Register as an Employer: You must register with HM Revenue and Customs (HMRC) as an employer before the first payday. This can be done online and typically takes up to five days to process.
  • Understand Employment Law: Familiarize yourself with the basics of UK employment law, including the National Minimum Wage, working hours, and statutory rights such as sick pay and holiday entitlement.
  • Set Up Payroll: You’ll need to set up a payroll system to handle tax and National Insurance contributions. Many businesses use payroll software, or you can hire a payroll service provider. Ensure you’re compliant with Real Time Information (RTI) reporting requirements, which means sending information to HMRC each time you pay your employee.
  • Provide a Written Statement of Employment: On or before their first day, provide your new employee with a written statement of employment particulars. This document should include essential information such as job title, salary, and working hours.
  • Check Right to Work: Verify that your employee has the legal right to work in the UK. This involves checking their passport or other acceptable documents.
  • Employer’s Liability Insurance: Obtain employer’s liability insurance, which is a legal requirement if you have employees. This protects your business in case an employee is injured or becomes ill due to their work.
  • Pension Scheme: Enroll your employee in a workplace pension scheme if they meet the eligibility criteria. This is part of the auto-enrolment process that most employers must comply with.

By following these steps, you’ll ensure compliance with UK regulations and set a strong foundation for your business as you grow your team.