Legal Obligations

Are you covered legally in your payroll?

Before businesses start paying staff, they need to ensure that their staff are legally allowed to be working. Many people are unaware that it is the legal responsibility of every employer to ensure that all of the company’s employees are legally allowed to work for the business. Small businesses which are expanding their staff need to be sure that all potential employees are legally allowed to be in the UK and legally allowed to work whilst they are in the country, as some visitors may be here illegally or may not have suitable work visas / permits.

Whilst UK citizens and many European Economic Area (EEA) citizens will automatically be able to work, all employers should check the eligibility of potential employees by carrying out document checks. To safeguard the company against any suggestion of irregularity employers must record the details of every document they are shown (this is usually done by photocopying or scanning the relevant parts of the documents) but must not keep the original documents for more than 24 hours.

New employees will usually bring with them a P45 form from their previous employer, which includes information such as their National Insurance number and tax code, and the new employer will need to complete the form and return it to HM Revenue and Customs.

Once new employees are settled into the company, every business must ensure that it complies with the tax obligations of an employer. These include making sure that you pay Corporation Tax and filing company tax returns, as well as ensuring that you pay every employee in a transparent and legal way ie: no cash in hand payments.

Employers must also comply with their legal responsibilities to their employees, who are entitled to be paid at least the minimum wage and to receive regular payslips detailing their earnings and any deductions.

For more information on ensuring that employees are eligible to work in the UK the Business Link website has guides and an interactive service: http://www.businesslink.gov.uk/bdotg/action/layer?r.l1=1073858787&topicId=1073981874&r.l2=1079568262&r.s=tl

For more information on corporation tax please visit the HM Revenue and Customs website: http://www.hmrc.gov.uk/ctsa/intro-pack.htm

For more information on the legal requirements related to paying employees the HM Revenue and Customs website has more information: http://www.hmrc.gov.uk/paye/daytoday-paying.htm