As an employer, you will use PAYE (Pay As You Earn) when you pay your employees. This is a tax collection system that takes tax from your employees’ pay cheques at the source and sends this money to HMRC.
It’s your responsibility as an employer to run PAYE, though you may choose to pay someone else, such as an accountant or payroll bureau to do this work for you.
As well as running PAYE to deduct your employees’ Income tax and National Insurance contributions, you are also responsible for sending in returns to HMRC to show the Income tax and National insurance that is due and paid.
Employment Allowance
Many employers are eligible for ‘Employment Allowance’. This is a government incentive which can reduce the amount of National Insurance an employer pays. Please take a look here for more details https://www.gov.uk/claim-employment-allowance
Real Time Information (RTI)
This system replaces the need for employers to make end-of-year returns. The employer must still give the employee a statement of gross pay and tax deducted for the year (form P60) and a statement of taxable benefits (P11D).
RTI also changes the way employers report new employers and leavers. P45 forms should still be given to the employee, although copies of these forms no longer need to be sent to HMRC.
Employers must still keep a record of wages and deductions, and provide employees with wage slips and tax forms. HMRC can inspect your wage records to ensure these are correct.
