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At first you may be able to run your business by yourself, if not, or as your business expands, you may need to employ people. If you do need recruit employees, you should know you responsibilities as an employer. Every employee, whose employment continues for one month or more, has the rights to receive written statement setting out certain details of the employment. This should be provided no later than two month after their employment starts.
If you send HM Revenue & Customs your Employer Annual Return (or part of your return) on paper or magnetic media, when you're required to file online, you may be charged a penalty. The precise amount of the penalty depends on the number of P14s included in your return and is up to a maximum of £3,000. Contact us to see how we can assist you.
This statement must include the following details:
All employees are entitled to receive a statement of their terms and conditions of employment, whether or not that is in the form of a formal contract, a letter of appointment or any other written form. If the employer only uses a letter of appointment, rather than a formal contract, however, the courts may imply contractual terms. It is always better, therefore, to issue a formal contract to all employees.
The content of the statement of employment must include:
Generally, when recruiting an employee, it is a illegal to discriminate on the ground of race, sex, disability and marital status, however there are certain limited exceptions. The anti-discrimination law continue to apply to all other parts of an employee's job, including wages and holiday entitlement after the recruitment process, Your business could be held liable for any discrimination of if you are trading as an individual you are trading as individual you could be personally liable foe discriminatory actions.
If you employ anybody, either full time or part time, you are responsible for deducting income tax and National Insurance Contributions (NICs) from their wages, and you must also pay the employer's share of the NICs. If you are not sure about the NICs, always consult with the Inland Revenue. There are different tax and National Insurance rules depending on you circumstances.
When you take on someone you need to tell your local tax office. They will send you document which show you how much you need to take out of each employee's wages earning and where to send the money (Value Added Tax). You must record each employee's earning and tax and National Insurance Contributions and tell your local tax office about these amounts every year.
In the case of National Insurance, the contributions for your employee will be in two parts. You must pay one part and your employee must pay the other. These contributions depends on how much you pay your employee. The Inland Revenue will collect them at same time as they collect any tax. Inland Revenue office or Coddan Accounting team will be able to give you more advise on the National Insurance. Please feel free to ask.
Your own National Insurance depends on your circumstances. If you are company director you will be treated in a similar way to your employees. You will be classed as an employee of your company and will pay contributions in the same way as your employees but, there is a special way to access director's National Insurance. You can get assistance in the local Inland Revenue office, or ask Coddan for help.
If you are sole trader, partner or member of an LLP you will need to contact Inland Revenue to get more information about your tax liability. You choose wherever to pay your National Insurance contributions every month by direct debit from your bank account, or every three month when you will receive a bill. Your contributions will be charged at the same rate each week. You may also have to pay an extra contribution or any profit your business makes. This is assessed and collected along with your income tax.
You must make sure that, as far as is reasonably, the health, safety and welfare of your employees is a not at risk whilst they are at work. You may contact your local health and Safety Executive for advice and information which will help you set up important safe legal working conditions for employees.
It is illegal to refuse a person employment because he or she is or is not a member of a trade union. You should know various law which protect employee's rights to choose whether to join a trade union.
We hope you will never have to take such a drastic step, but if you do, you must have a valid reason for dismissal and you must act reasonably and follow procedures. Unless the dismissal is for gloss misconduct, you must give employee notice of dismissal as set out in their contract. Failure to give proper notice may lead to a wrongful dismissal claim.
One alternative to employing directly is to sub-contract some work. This may be more cost effective in ironing out short-term trading highs and laws, night alternative some of the responsibilities of an employer. However legal responsibilities can arise in this respect, for example under the Transfer of Undertakings (Protection of Employment) regulations 1981.
As an employer, it is essential you know about the following issues and how the law deals with them
You can get leaflets on the issues above from the Department of Trade and Industry, Advisory Conciliation and Arbitration Service of the Department of Social Security. The law in these areas change frequently and, you should know about the following current employment laws: