Bringing in staff means you must comply with certain rules and regulations. Staff pay and registering employees with HMRC must be near the top of these. Employing people without registering them with the tax office and attempting to evade your wage or tax obligations is a serious offence. Therefore, you need to do this as soon as possible.
As an employer you are responsible for deducting tax and class 1 National Insurance contributions from your employee under the Pay As You Earn system (PAYE). Then you will need to send the tax and National Insurance contributions (NIC) you have deducted to HMRC.
During the tax year you also have to do the following:
Deduct the correct amount of PAYE from your employees salary
Work out how much NICs you and your employees have to pay
Keep a record of your employees' pay, PAYE and NICs due
Make monthly (or quarterly) payments of the total PAYE and NICs due to the Accounts Office
If your employees are able to claim working families' tax credit, disabled tax credit and student loan deductions you have to pay these with your employees net pay. Tax credits are not subject to deductions of PAYE or NICs. This has to be shown on your employee's pay slip.
At the end of the tax year you must:
Send a return to the HMRC showing details of each employee's total pay and the PAYE and NICs due.
Pay this over to HMRC each month. This can be done quarterly if your average monthly payments of tax and NIC are below £600
Inform your tax office at the end of each tax year how much your employee has earned and how much tax and NIC you have deducted, you must also provide full details of any benefits paid such as private health insurance etc.
You must provide your employee who has paid PAYE or NICs and is still working with you at the end of the tax year with statements showing their earnings, tax and NIC deductions made and any benefits provided.
Obviously this can all take a lot of time, one solution would be to use a payroll agency which will complete a lot of the paperwork and day to day administration for you. Otherwise software companies such as Sage and Intuit have a range of payroll and accounting packages which save a lot of time and can also handle other aspects of business accounting. Of course, you might just want to hire the services of a bookkeeper on a full or part-time basis.