When you take on new employees there are various stages you need to go through as an employer to ensure your new employee is dealt with correctly.
Firstly you will need to decide what their correct employment status is. Then you will also need to check they can legally work for you.
After you have been through these checks and you go on to employ them, you will then need to consider whether you have to operate PAYE (Pay As You Earn) on their earnings.
When you are paying someone for the first time, there are a number of things you need to help you decide how much PAYE (Pay As You Earn) and National Insurance contributions (NICs) you need to deduct before you pay them.
In order to be able to calculate deductions you will need two key pieces of information for each employee:
• A tax code to help you to work out how much PAYE tax should be deducted
• A National Insurance category letter to help you to deduct the correct amount of NICs
When someone changes jobs, they should be given a form P45 by their old employer. This shows your new employees:
• National Insurance number
• Tax code
• Total pay and tax to the date they left
If your new employee doesn’t give you a form P45 you will need some previous employment information from your employee. You can use the form P46 to collect this information.