HR & People
Employers’ Liability Insurance: Do You Need It?
Do you need employers’ liability insurance? Learn when cover is compulsory, the £5 million minimum and exemptions for solo founders and family businesses.
PAYE Registration: How to Register as an Employer
Learn when your company needs PAYE registration, how to register as an employer with HMRC and what to do before paying yourself or your first employee.
By Callum Sommerton12 October 20263 min read
Before your company starts paying salaries, you’ll usually need to register as an employer with HMRC. That includes paying yourself as a director and it applied even if you’re the only person working in the business.
PAYE stands for Pay As You Earn. It’s the system used to collect Income Tax and National Insurance through payroll.
When do you need to register?
For 2026/27, HMRC says you must register for PAYE if any employee:
Is paid £96 or more a week.
Receives expenses or company benefits.
Receives a pension.
Has had another job in the current tax year.
Has received Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit in the current tax year.
The registration threshold is different from the threshold at which an employee starts paying Income Tax. A salary can require PAYE registration even when no Income Tax is deducted. If none of the conditions applies, you may not need to register, but you must still keep payroll records.
What if you’re only paying yourself?
The same registration rules apply to a company paying its director. For example, a solo founder taking a salary of £1,000 a month will need a PAYE scheme, even with no other staff.
Dividends aren’t processed through payroll. They have separate approval and personal tax rules, covered in our guide to tax-efficient director pay.
When should you register?
Register before your first payday. You cannot register more than two months before you start paying people.
Leave time for HMRC to process the application and send your employer PAYE reference. Incorporating a company doesn’t automatically register it for PAYE.
How do you register?
Use the official service. Go to GOV.UK: Register as an employer. Most limited companies with one to nine directors can register online.
Provide the requested details. Have your company information and planned first payday ready, then follow the questions for your business.
Keep your HMRC references. You’ll need your employer PAYE reference for payroll reporting and your Accounts Office reference for payments.
Set up payroll. Choose suitable payroll software or appoint an accountant or payroll provider.
These references are separate from your company’s Corporation Tax UTR.
What happens after registration?
Registration is the starting point. Each time you pay someone, you need to calculate pay and deductions, provide a payslip and normally report the payment to HMRC on or before payday.
You must also pay HMRC any tax and National Insurance due and complete the relevant year-end tasks.
If your first payday arrives before your PAYE reference, HMRC says to run payroll, store the Full Payment Submission and submit it late once the reference arrives.
An accountant can help set this up and manage the ongoing reporting. Read when founders need an accountant if you’re deciding how much support to use.
