A guide to notifying HMRC about a new employee

Are you a business owner who is looking to hire a new employee? If so, then you need to be aware of the rules and regulations that come with informing HMRC about the addition to your team. This guide will explain exactly how to go about notifying HMRC about your new employee in order to ensure that everything runs smoothly.

The first step in any new hire process is to notify HMRC. This can be done online, by phone, or by post. When you notify HMRC about a new employee, you will need to provide:

- The employee's name, date of birth and National Insurance number

- Your employer reference number

- The employee's start date

- The employee's pay details (including their salary and any other payments they receive)

You will also need to let HMRC know if the employee is going to be working part-time or on a fixed-term contract. Notifying HMRC about a new employee is quick and easy, and it will ensure that the correct amount of tax is deducted from their wages.

Reasons for notifying HMRC about a new employee

If you're an employer, you need to let HMRC know about any new employees within 3 days of them starting with you. You can do this by either registering them for PAYE online or sending a completed starter checklist to your local HMRC office. There are a few reasons why it's important to notify HMRC about your new employee:

1. To make sure they pay the right amount of tax If you don't notify HMRC about your new employee, they may not have the correct tax code and could end up paying too much or too little tax.

2. To avoid penalties If you don't tell HMRC about a new employee within 3 days, you could be fined £100 per employee. And if you don't register them for PAYE at all, you could be fined up to £3,000 per employee.

3. To make sure they get the right entitlements If you don't notify HMRC about a new employee, they won't be able to claim certain entitlements like Statutory Maternity Pay or Statutory Sick Pay. This could cause hardship for your employees if they suddenly find themselves without income when they're off work due to illness or pregnancy.

How to notify HMRC about a new employee

If you're an employer, you must let HM Revenue and Customs (HMRC) know when you start paying someone for the first time. You can do this by registering as an employer with HMRC. Once you've registered, you'll need to set up a PAYE scheme. This is where you'll report the payments you make to your employees each month. Once you've done that, you need to let HMRC know about each new employee within three days of them starting work. You can do this online or by phone. When you notify HMRC about a new employee, you'll need to give them:

- The employee's name, address and date of birth

- Your PAYE reference number

- The employee's National Insurance number

- The first day of the tax month in which they started work

- How much they're paid and how often they're paid

- Whether they have another job and, if so, their payroll reference for that job If you don't have all the information to hand when you notify HMRC, don't worry – you can provide it later. Just make sure you have everything ready before the end of the tax month in which the employee started work.

Benefits of notifying HMRC

There are many benefits to notifying HMRC about a new employee, including:

- Ensuring that the new employee is correctly registered for PAYE

- Avoiding late payment penalties for the employer

- Allowing the new employee to start receiving their tax credits and other entitlements

- Ensuring that the new employee receives their full entitlement to Statutory Maternity Pay, Statutory Paternity Pay, Statutory Sick Pay, and other statutory payments Notifying HMRC about a new employee is quick and easy to do, and can be done online or by telephone.

What happens after you have notified HMRC

When you have notified HMRC about a new employee, they will send you a starter checklist. This will include everything you need to do as an employer to get your new employee set up on PAYE. You will need to provide HMRC with information such as:

-Your new employee's name, address and National Insurance number

-The date they started work

-Their pay and hours - If they have another job or get any other income

Once you have provided HMRC with all the relevant information, they will calculate how much tax and National Insurance your new employee should pay. They will then send you a notice of coding, which will tell you how much to deduct from your employee's pay.

Penalties for failure to notify HMRC

If you don't notify HMRC about a new employee, you may have to pay a penalty. The amount of the penalty will depend on how many employees you have and how long you've been failing to comply. The minimum penalty is £100, and the maximum is £400.

Conclusion

It is important to notify HMRC of any new employees in your business as soon as you can. This will help ensure that they are registered correctly and pay the right amount of tax and national insurance. By following the steps outlined above, you should be able to quickly complete the necessary paperwork for HMRC and start paying your new employee on time. It is also worth considering a payroll system such as RealTime Payroll which makes it even easier to manage all aspects of payroll including registering new employees with HMRC.

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