In order to employ employees, including directors, each company must be registered with the Employer’s Pay As You Earn system (PAYE). This acronym means that all official fees – mainly Income Tax and National Insurance Contributions – are charged and should be paid by the employer according to the amount of income of the employee. The employer’s representation in the PAYE system is required from every potential employer, while ‘Pay As You Earn’ is a universal, generally accepted form of accounting for employees and calculating taxes & National Insurance Contributions.
Employer registration is necessary in any company that wants to have legally registered employees, even if they are only directors/owners of the company. All entrepreneurs should remember that registration with Companies House is not sufficient to employ employees and only after receiving the PAYE number is the employer’s registration legally binding. For workers who do not have a NIN, there is a 3-month transition period during which they must produce one.
It takes about 2-3 weeks for an employer to register in the UK, and the only requirement you need to fulfil in addition to having a registered business is for at least one of the directors of the company to have a National Insurance Number.
Employers may register in the PAYE system by both Companies Limited and the self-employed, as well as by the owners of the Partnership’s activities.
If you need assistance in registering your company, please contact us and we will register on your behalf.