5 additional responsibilities of a small business owner

As your business grows, the demands on your time as a small business owner will increase and you may want to take on your first employee and eventually grow your team. The transition from working by yourself to employing people has additional responsibilities.

These are the 5 additional responsibilities you need to be aware of when you take on an employee.

1. Check that you already have a PAYE scheme- If you are a director of a company chances are that you may already have a PAYE scheme set up for taking your own salary. If you have this in place, that is great. If not, you may need to register as an employer with HMRC to let them know that you will be taking on employees. Having a PAYE scheme allows you to deduct income tax and National Insurance from your employees before paying them.

2. Find a suitable candidate and issue them with a contract - Your employee needs to have the skills and attitudes required the deliver the work for your business. Most importantly their values need to match yours, otherwise, there may be unnecessary conflict. The contract of employment will outline their pay and benefits as well as the responsibilities for both the employer and employee.

3. Check that you have a Workplace Pension scheme in place - Workplace pension law has changed and employers are required by law to add qualifying employees to a workplace pension scheme. Both the employer and employee will contribute towards the employee’s pension savings pot. The minimum contribution rates are 5% for employees and 3% for the employer, which must be collected by the employer and sent to the pension provider every month. There are many pension providers in the marketplace but NEST is the one set up by the government. The scheme chosen must meet the requirements of a Workplace Pension scheme. Here is a guide on how to choose a pension scheme.

4. Once you have a pension scheme you must assess your employees and communicate to them their options based on your assessment of their age and earnings - Qualifying employees must be added to the pension scheme while Non-eligible and entitled workers are given an option to join voluntarily. More details are on The Pension Regulator website. You will also need to complete a declaration of compliance with The pension regulator to let them know how you have complied with these regulations

5. And finally, the new employee needs to be added to the payroll - There will be an additional class 1 National Insurance Contributions payable by the employer. As of the 2022-2023 financial year, the is an employment allowance of up to £4,000 to help employers ease the burden of Class 1 National Insurance Contributions. Income tax must be calculated and a Real-Time Information ( RTI) report filed with HMRC before the employees are paid.

That marks the 5 key responsibilities you will face as an employer. If you are an existing employer, it I important to check that you are complying with these requirements and if there are any gaps, reach out and we can help you become compliant.

There is an important saying that YOU Cannot grow your business, YOU grow your PEOPLE, and your people grow your business.

Get in touch today!!

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