Registering as an employer
This page tells you about registering as an employer with HM Revenue & Customs (HMRC). Please note that there are a handful of occasions when you do not need to register with HMRC, even if you are an employer.
In what circumstances do I need to register as an employer with HMRC?
Example of registration requirement
Is there a timeframe for registering as an employer?
I run a business. Can I just add my PA to my existing payroll?
Before you register
Registering as an employer for paper filing
Registering as an employer for online filing
Registering for PAYE for Employers if you already have an HMRC online account
What happens if I register late?
Cancelling your PAYE registration
You will need to register as an employer with HMRC if any of the following are true:
- You are paying your personal assistant (PA) at or above the National Insurance Lower Earnings Limit (LEL) (£116 per week in 2018/19). This is the same as £503 a month or £5,876 a year. If you pay your PA on a 4-weekly basis, the relevant threshold is £464. For an example of how the LEL threshold works, see below.
- The PA already has another job.
- They are receiving a state, company or occupational pension.
- You are providing them with employee benefits.
What this means is that if you have only one employee, who works a few hours a week for you at say, £8 an hour, and has no other job or income, then the conditions above will not be met as their weekly earnings will be below the LEL and you will not have to register as an employer or set up a Pay As You Earn (PAYE) scheme. (This is because such an employee will not have a tax or National Insurance liability.) If you have several employees, none of whom meet the conditions above, then again, you do not have to register with HMRC. However you may need to keep some basic information about such employees including how much you pay them – see our section on 'Keeping Records' for more on this. You will also need to give them payslips.
On the other hand, if you have two employees, one of whom earns £100 a week (employee 1) and has no other income, and one of whom earns £175 a week (employee 2), then you will have to register as an employer with HMRC in respect of the employee 2. Having an ‘active’ PAYE employer record open with HMRC because of employee 2 then means that you will be obliged to send information to HMRC about both employees, even though there is nothing to pay over to HMRC in respect of employee 1.
You can find out more about registering as an employer on GOV.UK.
If an employee was paid on a 4-weekly basis and within a 4 week period, their wages were £116, £100, £120 and £80 (totalling £416) then there would be no registration requirement because the £464 threshold has not been breached, notwithstanding that in some individual weeks their wages were at or above £116 (provided they were genuinely earning their wages over the 4-weekly period – and not being paid weekly). If within those weeks, the worker’s wages were £112, £116, £127 and £115 (totalling £470) then there would be a registration requirement because the £464 threshold has been exceeded.
If the worker was paid weekly then there would be a registration requirement in both scenarios.
If you need to register as an employer you should do so in advance of the first payday. You should try and start the process in plenty of time, as it can take up to 2 weeks for HMRC to process the registration. However, you cannot register more than 2 months before you start paying people.
HMRC’s Employer Helpline advise that in such a situation, it would probably be best to manage your PA's payroll separate from that of your business. The logic is that businesses are allowed to take tax deductions for their employees' wages and unless your PA directly contributes to your business, his or her wages cannot be taken as a business tax deduction. Keeping the two sets of payroll records separate, therefore, prevents accidental calculation errors and keeps everything clean and tidy.
As such, they advise that you should register as a new employer with HMRC for your PA. This will mean that a new PAYE reference is generated under which you can then manage your PA’s payroll.
There are two ways of running your payroll and sending information about payments you make to your PA to HMRC – electronically or manually.
HMRC require most people to send the information electronically (or ‘online) using software. But if you are employing a PA, HMRC might treat you as a ‘care and support employer’ which means you can still use paper to send information to HMRC.
You can find out more about who qualifies for paper filing and the advantages/disadvantages of each option in our filing options section.
Once you know whether you are going to file online or on paper, follow the instructions below to register as an employer with HMRC.
It will help if you have the following details ready when registering:
- your name and address
- contact details, e.g. telephone number, email address
- type of business - care and support employer
- number of employees you expect to employ
- date of first payday (if known)
- your National Insurance number (if you cannot find this, or have forgotten it, please see our information on how to trace a lost NINO here).
Check our filing options section to make sure HMRC will let you use the paper option.
Phone HMRC's New Employer Helpline on 0300 200 3211 and tell them that you want to register as an employer of a PA.
The HMRC adviser should talk with you about the different ways of running your payroll, e.g. paper or online. If you have decided you want to use the paper option, you should make this clear to the HMRC adviser and be prepared to explain why if necessary (e.g. because you meet the care and support employer conditions).
If you have a speech impairment, are deaf or hard of hearing and use a text phone you can contact HMRC by text relay or by text phone. The Textphone number is 0300 200 3212.
For further guidance on dealing with HMRC if you have specific needs, see our 'dealing with HMRC' page.
After you have registered, HMRC will send you a letter headed ‘New employer registration and reference numbers’ with:
- an Accounts Office reference (example 123PA00045678)
- a PAYE reference (example 123/A246).
This is the only notification you will receive, so keep these details safe.
You must use your Accounts Office reference when making payments and contacting HMRC about payments. You should use your PAYE reference in all other contacts with HMRC and on all your payroll records, as this is your payroll reference.
You may have come across the online 'Register as an Employer' tool on GOV.UK, however please note that as a care and support employer, you cannot use this. (Even though step 3 of the online process gives you an opportunity to check a box that you are 'an individual employing a carer or support worker in your home', making that selection tells you that you must register as an employer by phone.)
Once you have registered, HMRC will issue you with your:
- Accounts Office reference (example 123PA00045678)
- PAYE reference (example 123/A246)
You must use your Accounts Office reference when making payments and contacting HMRC about payments. You should use your PAYE reference in all other contacts with HMRC and on all your payroll records, as this is your payroll reference. Keep them safe.
Once you have your PAYE and Accounts Office references (see step 1 above), you will then need to register for ‘PAYE for Employers’ which is part of HMRC’s Online Services (which in turn, is accessed via the 'Government Gateway' – the centralised registration service for e-Government). This service allows you to upload information about the payments you make to your PA over the internet direct to HMRC. You can also view your account including payments made, employer notices such as tax code notices, reminders and so on, which you may find helpful.
You need to take the following steps, even if you already have an HMRC Online Services account, for example for self-assessment. (This is because this will be an account for you as an individual and for ‘PAYE for Employers’ you need an account as an organisation – see more on this below.)
Take the following steps:
- Go to https://www.gov.uk/paye-online/enrol and follow the link under the section ‘You don’t have an account’
- Click on 'Organisation', and select 'PAYE for Employers' on the next page
- Read the pages ‘What you will need to enrol’ and ‘Registration and Enrolment’
- Read and accept the terms and conditions of HMRC's Online Services
- Enter your name and email address
- Create a password, making sure to keep it somewhere safe as you will need it to use the service in the future
- You will be given a Government Gateway User ID – write it down or take a screen print as you will need it to use the service and/or to make online payroll submissions. Please note that your User ID and pasword may also allow you to access other online Government services.
- Enter your employer PAYE reference and Accounts Office reference.
Now you must wait for a letter in the post. This will contain the Activation Code (a security measure) you need to access the service for the first time. This may take a week or two. Once you receive the Activation Code, follow the instructions that come with it to log in to your HMRC Online Services account.
You must activate your PAYE for Employers service within 28 days of the date shown on the letter or the code will expire and you'll have to request a new one.
Please note that other HMRC services you register for may require separate Activation Codes.
You may already have an HMRC Online Services account – for self-assessment perhaps. This will be held by you in your capacity as an ‘individual’.
In order to register for ‘PAYE for Employers’, you will need to hold an HMRC Online Services account as an ‘organisation’ (HMRC assume every employer is a ‘business’). So you will have to follow the process to register as detailed above in Step 2 and obtain a new Government Gateway ID and password as an organisation. The User ID and password that you have as an individual should be retained so that you can continue to access your self-assessment account.
You may have seen the guidance on GOV.UK that suggests that where you already have an account, it is a simple case of adding the ‘PAYE for Employers’ service. However, we can advise that this is not the case – you cannot add PAYE for Employers to your existing individual online account.
When you want to access your PAYE for Employers service (once it is set up), you can log in via GOV.UK. You can find information on what to do if you forget your User ID, password or have other problems signing in there too.
If you do not register with HMRC before you pay your staff for the first time, then there are not any late registration penalties per se, however it follows that you will not have made the necessary payroll submissions to HMRC on time, and possibly not paid the tax due on time either. Both of these carry the possibility of interest and penalties. Therefore you should correct this and register as soon as possible if you need to. For further details, see our section getting things wrong.
If you stop being an employer or your PA starts earning below the relevant LEL limit (and you expect it to be permanent) then you should inform HMRC so that they can close your PAYE record. You can usually do this when you send your last lot of payroll information to HMRC. You can find out more on stopping being an employer on GOV.UK.
If things change, for example, you start to employ someone again, you must let HMRC know straight away. They will then set up a new PAYE scheme and issue you with a new reference number.