Hiring

Most employers in the UK are private companies registered in England and Wales. However, individuals and sole traders can also be employers. For more information, read Business structures.

It is also possible to hire employees directly from a foreign-registered company or personally or through other corporate structures like partnerships. Hiring staff directly from a foreign entity may mean that the company has established a UK presence for tax and corporate reporting purposes, so seek appropriate advice if you decide to take this route.

All employers of staff based in England and Wales must, by law, purchase Employer’s Liability Insurance coverage of at least £5 million. For more information, read Business insurances.

This type of insurance pays out if an employee suffers personal injury at work.

You must display your insurance certificate to employees.

You must register with Her Majesty’s Revenue and Customs (HMRC) when you employ someone, with very few exceptions.

This applies even if a company that you own employs you.

You will need to make arrangements to withhold income tax from employees’ wages and pay this to HMRC (PAYE), along with employer’s national insurance contributions.

In practice, many small businesses outsource their arrangements for tax and payroll.

Employment in the UK is highly regulated, with most aspects of the employer-employee relationship subject to legal rules.

You don’t need to become an expert straight away, but research now will save you time and trouble later on.

As a minimum, you will need to be ready to ensure that any offer of employment you make complies with certain minimum standards. Consider using Rocket Lawyer's Offer of employment to ensure you meet these.

When you hire someone, you form a relationship under which you each have duties. The employer has to pay wages to the staff and the staff have to work in accordance with their employment contracts or written statements. All this is regulated by HMRC, who need to be kept fully informed of the status and actions of the parties.