As an employer you are responsible for:
- ensuring all staff receive the national minimum wage. They key exceptions are family members living in the same household and directors with no employment contract;
- deducting class 1 (employees) national insurance and pay as you earn (PAYE) from the employees wage packet;
- paying class 1 (employers) national insurance;
- operating statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption pay;
- deducting student loan repayments;
- filing end of year PAYE reports and returns of benefits;
- paying class 1A national insurance on any benefits-in-kind; and
- paying any class 1B national insurance payments on any items covered by a settlement agreement (PSA).
The blog post on contracting contains guidance on whether an individual is employed or self-employed. It is important that you know whether someone is an employee or self-employed as there are serious penalties and interest charges if PAYE is not operated correctly.
If you decide to operate your payroll yourself there are a number of software products with HMRC approval or you can use the systems and tables that HMRC provide. Alternatively you can outsource your payroll to us.
Many companies provide perks and benefits to employees such as private medical insurance or cars. The table below is a list of tax-efficient perks and tax free expenses:
|Tax-free perks||Tax-free expenses|
|Employer contributions to your pension fund||Reimbursed expenses (ask about a dispensation)|
|Subsidised staff canteen||Mileage allowance payments up to 45p for 10,000 miles and 25p thereafter|
|Workplace nurseries, exclusively for employees or £55 a week in childcare vouchers see our blog||£3 per week for extra household costs if you regularly work from home (£4 from April 2012)|
|Long-service awards require a 20 year service and cannot exceed £50 per year||Parking at or near the workplace|
|Provision of one mobile phone or PDA (Blackberry, iPhone)||Medical check-ups including eye tests|
|Office parties not exceeding £150 per head|
|Cheap or interest free loans up to £5,000|