Page 10 - Town & Around - March 2025

10 Town & Around March 2025 Tel: 01485 540620 email: editor@townandaround.net
Are you planning to take on your first employee?
By Gerald Bloye, Associate, Hayes + Storr

f you’ve started a business and are looking to be a worker.
to expand, hiring staff might be the next Example of a worker: An IT consultant
Isignificant step. The first crucial decision is required to work from your office during set
whether to employ someone or engage a self- hours, using your equipment, and following
employed contractor. Getting this wrong can your instructions.
lead to serious legal and financial liabilities. Example of a genuine contractor: A website • Arrange for pension auto-enrolment if the
developer who sets their own schedule, works
Employment Status: employee or from home, and uses their own equipment. employee meets the criteria.
contractor? It’s vital to review the actual working • Ensure the workplace is safe, including
Understanding the difference in employment relationship, not just the contract wording, as home-working arrangements, to comply with
status is important as it determines your legal courts, tribunals, and HMRC will do the same. health and safety laws.
obligations. The differences can be subtle, and • Review your data protection processes.
even with a contractor agreement, you could Steps to becoming an employer Provide a privacy statement explaining how
unintentionally create an employer-employee If you decide to employ someone, here are employee data is handled.
relationship. the key steps to get started: • Conduct necessary pre-employment
This can lead to claims like unfair dismissal Before recruitment: checks, such as verifying the right to work in
and HMRC chasing unpaid tax and National • Define the role clearly to target your the UK, to avoid fines.
Insurance. recruitment and set expectations. Key legal documents
Even if the person isn't an employee, they • Budget for salary and on-costs like tax, You must provide a contract of employment
could be classified as a ‘worker’ with rights to National Insurance, pensions, and benefits. by the first day of work. Contracts should be
holiday pay and other protections. Key factors Ensure compliance with national minimum tailored to your business and clearly set out
to consider: wage laws. terms. Policies, particularly on discipline and
• A self-employed contractor is their own • Consider funding options, such as grievances, are essential. They help manage
boss and can decide how to do the work. apprenticeships or government schemes. employee relations and reduce the risk of
• An employee is under your day-to-day claims.
control and must do the work themselves. Before they start:
• A contractor can turn down work and send Register with HMRC as an employer to get How we can help
someone else to do it, unlike an employee. a PAYE number. This can take up to 30 days. We help businesses set up as employers,
• Arrange employer’s liability insurance to ensuring contracts and policies are in place to
Understanding the difference avoid fines. meet legal requirements. For more information,
If the business controls how, when, or where • Set up payroll through a provider or payroll contact Gerald Bloye on 01328 863231 or
the work is done, the individual is more likely software that meets HMRC requirements. email Gerald.bloye@hayes-storr.com.