Tag: Employment
What must I do before hiring my first employee?
Before the first payday you need to register as an employer with HMRC and set up PAYE. From day one you must have Employers’ Liability insurance (at least £5 million of cover, with a £2,500 daily fine for going without) and a written statement of employment for the employee. Workplace pension duties start on the day they start work. Check they have the right to work in the UK, and pay at least the National Minimum Wage. Cited to GOV.UK, checked 20 October 2026.
What are the National Minimum Wage rates for 2026/27?
From April 2026 the National Living Wage for workers aged 21 and over is £12.71 an hour. The 18 to 20 rate is £10.85, and under-18s and apprentices get £8.00. The rates rise every April. Get it wrong and you repay the arrears at today’s rates plus a penalty of up to 200%, capped at £20,000 per worker. Cited to GOV.UK, checked 20 October 2026.
Can I employ my spouse or family members through the business?
Yes, and done properly it is one of the more sensible bits of family tax planning. The rules: the work must be real, the pay must be commercially reasonable for the job, and it must actually be paid, through PAYE like any other employee. Pay a spouse with no other income a £12,570 salary and a one-director company is roughly £1,470 a year better off as a family. Pay them £40,000 for two mornings of admin and HMRC can disallow the excess. Cited to GOV.UK, checked 20 October 2026.
Do I have to give employees a written contract, and what must be in it?
You must give every employee and worker a written statement of employment particulars. The main part, the principal statement, is due on their first day, and the wider statement within two months. A written statement is not quite the same thing as a contract, but without one you have no written evidence of anything, and in any dispute that hurts the employer, not the employee. Cited to GOV.UK, checked 20 October 2026.