PAYE Scheme - How do I set it up? - your taxes explained

What you need to do to set up a PAYE scheme

You need to register a PAYE scheme to pay yourself and your employees, and deduct tax at source. You do not need to have a registered company when you want to employ someone directly in your business, but you will need a PAYE scheme to record their payments and deductions to the HMRC.

The steps to setting up the scheme are:-

Decide who you are going to pay and whether it is through a registered company or as yourself as the employer.
Decide when you want to make payments from (the starting date)
Have access to the business government gateway account, so that you can log in with this.
Have all your business tax details and your tax details to hand.
Use the HMRC weblink to log in and register the PAYE
You can access the HMRC link HERE https://www.gov.uk/register-employer

Once the PAYE scheme is registered and you have the confirmation from the HMRC, you can either use their online Basic Tools Software

You can download this here:- https://www.gov.uk/basic-paye-tools

Or you can use a Payroll software, either connected to your accounting software or separately. They vary in levels of cost, mainly depending on how many members of staff you employ.

Lastly you can contact your local Accountant or Bookkeeper, who would be able to set it up for you. Unless you have a good working knowledge of how payroll works, employment laws and employee rights, it is often a good idea to get your advisor to help you, because often employers are caught out on things like Employers National Insurance Contributions and Pension Contributions simply because they are unaware of the current rules.

Please contact us if you have specific questions on setting up a PAYE scheme