Registering as an employer with HMRC

What does registering as an employer mean?

In the UK, when you pay employees (or pay yourself as a director through payroll), you usually need to run PAYE. PAYE is HMRC’s system for collecting Income Tax and National Insurance through payroll.

To do this, you register as an employer with HMRC. After you register, HMRC gives you an employer PAYE reference number. HMRC uses this to link your payroll submissions and payments to your business.

When do you need to register?

You normally need to register when you start employing staff. HMRC also makes clear you must register even if the only person on payroll is you, for example if you are the only director of a limited company.

You must register before the first payday.

HMRC guidance and the registration page are here:
https://www.gov.uk/register-employer

What you need before you start

Most employers will need:

• A Government Gateway user ID (to use HMRC’s online services)

• Your business details (name, address, contact details)

• Details of when you will first pay someone

• Your PAYE scheme start date (usually the date you first pay someone)

The exact questions can vary depending on business type and circumstances, so it’s best to follow the HMRC registration steps on GOV.UK.

What happens after you register?

Once HMRC sets up your employer records, you’ll receive:

• An employer PAYE reference

• An Accounts Office reference

These are used when reporting payroll to HMRC and when making payments to HMRC.

How payroll reporting fits in

After registration, each time you pay staff you normally need to report payroll information to HMRC using Real Time Information (RTI). The main report is called a Full Payment Submission (FPS).

Mazuma’s payroll process uses software that is compatible with HMRC’s requirements, so payroll can be reported correctly.

HMRC’s overview of running payroll and reporting is here:
https://www.gov.uk/running-payroll/reporting-to-hmrc

Common mistakes to avoid

• Registering after the first payday, which can cause reporting and payment issues

• Not telling your us in advance when you plan to take on your first employee

• Confusing subcontractors with employees (some subcontractors in construction fall under CIS, which is separate)