When you become an employer for the first time, you may need to register with HM Revenue and Customs. You may also be obliged to begin operating a payroll scheme.

Should I register as an employer?

You do not necessarily have to register as an employer with HMRC, even if you are employing someone for the first time. You will have to register as an employer if any of the following apply:

• you are paying your employee at or above the PAYE threshold (currently set at £125 per week or £540 per month for 2009-10);
• you are paying your employee at or above the National Insurance threshold;
• you are providing any kind of employee benefits;
• your employee has another job;
• your employee is receiving an occupational or state pension.

It is important to remember that company directors are treated as employees. As such, if you are the sole director of a limited company you may have to register as an employee, even if you do not hire anyone else.

How do I register as an employer?

It is normally possible to register as an employer online. You can begin the registration process on the HM Revenue and Customs website by clicking here.

However, some companies may not register online. You must register by phone if:

• yours is a limited company with more than nine directors;
• yours is a partnership with more than 10 partners;
• or you are operating a simplified PAYE scheme and have more than 1o employees.

You can register by phone by calling 0845 60 70 143.

What next?

Once you are registered as an employer, HMRC will send you a new employers’ information pack. This contains printed material and a CDROM with forms and instructions showing you how to set up your payroll system.

There are, of course, many other legal responsibilities facing employers. Becoming Self Employed will soon be launching a new section explaining these responsibilities. Stay tuned!