How Do I Register as an Employer with HMRC?

If you employ staff, you must register as an employer with HMRC. Learn when and how to register, what information you need, and how to set up payroll correctly.

Introduction

If your charity, business, or organisation plans to hire staff or pay anyone through payroll, you must register as an employer with HMRC. Registration ensures you can operate PAYE (Pay As You Earn), which allows you to deduct Income Tax, National Insurance, and other contributions from your employees’ pay.

Even if you employ only one person, or if you pay yourself as a company director, registration is required. This article explains when and how to register as an employer with HMRC, what information you will need, and how to stay compliant once registration is complete.

When You Need to Register

You must register as an employer if you:

  • Hire employees earning more than £123 per week

  • Pay employees who already have another job or pension

  • Provide employees with taxable benefits, such as company cars or bonuses

  • Employ temporary, part-time, or casual workers

If you are unsure whether your workers count as employees, check their employment status. Generally, if you control how, when, and where they work, and provide equipment or pay holiday entitlement, they are considered employees.

Charities and small businesses must also register if they pay trustees, directors, or certain volunteers through payroll, even if the payments are small.

When to Register

You should register as an employer before your first payday. HMRC recommends registering at least two weeks before you plan to pay staff, as it can take up to 10 working days to receive your PAYE reference numbers.

You cannot register more than two months before your first payday, so plan your timing carefully to avoid delays.

How to Register as an Employer

1. Register Online with HMRC

The simplest and most common method is online registration through HMRC’s website. You will need:

  • Your business or charity name, address, and contact details

  • Your organisation’s type (for example, limited company, sole trader, or charity)

  • The date you started or will start paying staff

  • Details of your first employee or director, including National Insurance number and start date

Once you complete the online form, HMRC will issue:

  • A PAYE Employer Reference Number

  • An Accounts Office Reference Number

These details are essential for running payroll and paying tax and National Insurance to HMRC.

2. Register as a Limited Company

If you operate as a limited company, you can register as an employer at the same time as registering your business with Companies House. When you do this, HMRC automatically sets up your PAYE scheme and sends your reference numbers by post.

3. Register by Phone or Post (in Limited Cases)

If you employ someone who works abroad, is paid in an occupational pension scheme, or you are applying as an agent on behalf of a client, you may need to register by phone or post instead of online.

What Happens After Registration

Once registered, HMRC will send you a letter confirming your:

  • Employer PAYE reference (used to identify your organisation)

  • Accounts Office reference (used when paying HMRC)

  • Online PAYE account details

You must then set up a payroll system to calculate wages, deductions, and taxes for each pay period. This can be done using:

  • Payroll software (such as Xero, QuickBooks, or Sage)

  • HMRC’s free Basic PAYE Tools (for small employers with fewer than 10 staff)

  • An external accountant or payroll bureau

Each time you pay your employees, you must report the details to HMRC through Real Time Information (RTI).

Key Payroll Responsibilities After Registration

Once registered as an employer, you have several ongoing responsibilities:

  • Calculate pay and deductions correctly for each employee

  • Report payments to HMRC on or before payday through RTI submissions

  • Provide payslips to all employees

  • Pay PAYE and National Insurance to HMRC by the 22nd of the following month (if paying electronically)

  • Set up a workplace pension under auto-enrolment rules if employees qualify

  • Keep payroll records for at least three years

Even if you have no payments to report in a pay period, you must still send an EPS (Employer Payment Summary) to HMRC to confirm no payments were made.

Special Rules for Charities

Charities must also register with HMRC as employers if they pay staff, even if they rely primarily on volunteers. A charity cannot pay wages or honoraria informally without proper payroll registration, as this can breach tax and employment laws.

Charities that reimburse volunteers for genuine out-of-pocket expenses (such as travel or meals) do not need to register, provided these are not fixed or regular payments.

Example Scenario

Imagine a charity called Helping Hands UK hires its first part-time administrator earning £200 per week. Since the salary exceeds the £123 weekly threshold, the charity must register as an employer.

The treasurer registers online with HMRC two weeks before the employee’s start date. Within 10 days, HMRC sends the PAYE and Accounts Office reference numbers. The charity sets up payroll software and processes the first payment, reporting it through RTI on payday.

Because the charity planned ahead, there were no delays, and it remains fully compliant with HMRC.

Common Mistakes to Avoid

  • Registering too late: Missing your first reporting deadline can cause penalties.

  • Using the wrong reference numbers: PAYE and Accounts Office numbers must be entered correctly in payroll software.

  • Forgetting to file RTI submissions: Late or missing reports can trigger HMRC fines.

  • Not setting up a pension scheme: Auto-enrolment applies to most employees over 22 earning above £10,000 per year.

  • Mixing volunteers and paid staff: Only genuine volunteers can be unpaid. Paying “thank you” gifts can unintentionally make them employees.

How an Accountant Can Help

An accountant can simplify the entire registration and payroll setup process. They can:

  • Register your charity or business as an employer with HMRC

  • Set up and manage payroll software

  • Ensure PAYE, National Insurance, and pension deductions are accurate

  • Submit RTI and other reports on time

  • Provide ongoing advice on employment tax and compliance

Having professional support helps avoid costly errors and ensures your organisation remains compliant from day one.

Conclusion

Registering as an employer with HMRC is a straightforward process, but it must be done before you pay your first employee. Once registered, you will receive the references needed to run payroll, report deductions, and stay compliant with tax and pension rules.

Using reliable payroll software or working with an accountant ensures your PAYE system runs smoothly and your organisation remains on the right side of HMRC regulations. Proper setup at the start makes managing payroll simpler, accurate, and stress-free in the long term.