Becoming an employer and running PAYE
Once you employ someone, you become responsible for operating PAYE — collecting income tax and National Insurance from pay and accounting for it to HMRC.
- You must register as an employer before the first payday
- Pay and deductions are reported to HMRC in real time, on or before each payday
- You'll handle statutory payments such as sick, maternity and paternity pay
- Payslips, records and deadlines all carry penalties if missed
How MMC helps: we can run your payroll end to end, keep you compliant with real-time reporting, and take the monthly admin off your desk.
Benefits in kind and expenses
Rewarding staff with more than just salary — company cars, private medical cover, loans — usually creates a taxable benefit, with reporting and National Insurance consequences for the employer.
- Taxable benefits are reported on form P11D or payrolled through the payroll
- Employers pay Class 1A National Insurance on most benefits
- Genuine business expenses reimbursed to employees are often exempt
- Good records are essential to separate taxable benefits from allowable costs
How MMC helps: we identify which benefits are reportable, prepare the forms, and advise on structuring rewards so they're tax-efficient for you and your team.
Off-payroll working (IR35)
The off-payroll working rules, often called IR35, are designed to catch arrangements where someone works through their own company but is, in substance, an employee of the engager.
- Status turns on the working reality: control, personal service and mutuality of obligation
- Responsibility for deciding status depends on the size and type of the engaging organisation
- Where the rules apply, tax and National Insurance are deducted as if the worker were employed
- Clear contracts and a recorded status determination matter
These factsheets are general guidance, not advice, and rates and thresholds change. For current figures see our tax rates & allowances page, and please contact us for advice tailored to your circumstances.
