Hiring Your First Employee? How to Register as an Employer With HMRC

"Welcome to the team, see you Monday."

By the time you've set the phone down, two deadlines are already ticking.

The first - register as an employer with HMRC before your new hire's first payday.

Yes, it applies even if the "employee" is just you, drawing a salary as the sole director of your own company. HMRC doesn't distinguish between a business with one person on the books and one with fifty.

You need to register as an employer if any of the following applies:

• You're paying someone £96 or more a week
• They already have a pension, or another job
• You're giving them expenses or benefits on top of salary
• You're using subcontractors under the Construction Industry Scheme

If none of these applies you might be able to hold off on PAYE for now, though most first hires clear at least the first one before their second week.

There's also a limit on how early you can move.

You can't register more than two months before you start paying someone, so wait until the start date is locked in, then register online through your Government Gateway account (create one if this is your first time round).

Most limited companies with one to nine directors can do the entire thing online.

Once you've submitted it, HMRC sends your employer PAYE reference and Accounts Office reference by post. It typically takes up to 15 working days to land, and you'll need both numbers to run payroll software and file your Real Time Information submissions, so this isn't a task to leave until the week payday's due.

If payday shows up before the letter does, run payroll as normal, hold onto the full payment submission, and send it to HMRC late once your reference finally turns up.

Around that same first payday, you're also deciding how much financial access this new person actually needs on day one, and "full trust, no limits" is rarely the right call for someone who started on Monday.

Ampere's corporate cards are free to issue, let you set an individual spending limit per team member, and you can set each teammate's account role anywhere from full control down to view-only.

Hand someone exactly as much rope as the role calls for.

Changed your mind by Friday afternoon? Pause or reissue it for free, no drama required. More on team cards

Pension duties start on a different day entirely: the one your new employee turns up and starts work, not the one they accepted the offer on. The Pensions Regulator calls this your duties start date.

This one's assessed employee by employee.

Anyone on your payroll who is aged between 22 and State Pension age, earning over £10,000 a year, and normally working in the UK has to be enrolled into a workplace pension.

It doesn't matter if this is your first hire or your fifteenth.

You have to pay in at least 3% of their qualifying earnings. Add their own contribution and the total comes to 8% minimum, with the remaining 5% coming out of their pay, though part of that is tax relief, so it costs them noticeably less than the number implies.

Once they're eligible, they're in automatically, and you're the one who has to make sure the numbers land correctly every payday.

If you're the only director and there's no one else working for the company, none of this applies to you, even with an employment contract in place. The only step left then is telling The Pensions Regulator you're exempt.

Then there's the paperwork nobody remembers exists until it's nearly due: a declaration of compliance to The Pensions Regulator, confirming you've done all of the above.

You have five months from the duties start date to file it, which sounds generous right up until you realise five months is also plenty of time to forget you ever did any of this. There's no exemption for "we checked and nobody qualified," because every employer has to submit one, even if it turns out nobody on the team was eligible.

Two deadlines get triggered by that one phone call.

So get the PAYE registration moving first, since its runway is tighter. You can line up a pension scheme provider in the meantime, but the pension clock, including your five months to file the declaration, only starts on the day your new hire begins work.

Handle it in that order and it's about as much control as new-employer life tends to offer.