Yes, taking someone on brings tax and payroll obligations, and getting the forms and reporting right from the start keeps you compliant and avoids penalties. Here is a plain-English guide for employers in England and Wales.
1. Register as an employer and set up PAYE
Before the first payday, register with HMRC as an employer and set up PAYE (Pay As You Earn). Through PAYE you deduct income tax and National Insurance from your employee's pay and pay employer's National Insurance.
2. Report to HMRC in real time (RTI)
You must report pay and deductions to HMRC on or before each payday under Real Time Information (RTI), submitting a Full Payment Submission (FPS) each time you pay staff. This is the core ongoing "form".
3. Get the new starter's details right
When someone starts:
- ask for their P45 from their previous job (showing pay and tax so far); or
- if they don't have one, use the HMRC starter checklist to work out the correct tax code.
This ensures they are taxed correctly from day one.
4. Year-end and benefits forms
- P60, at the end of each tax year, give each employee a P60 summarising their pay and deductions.
- P11D, report any taxable benefits-in-kind (e.g. a company car, private medical insurance) to HMRC, unless payrolled.
- P45, when someone leaves, give them a P45.
5. Check pay and pension obligations too
While not strictly "tax forms", hiring also triggers:
- paying at least the National Minimum/Living Wage;
- pension auto-enrolment (assess and enrol eligible staff, with a declaration of compliance to The Pensions Regulator); and
- arranging employers' liability insurance.
6. Contractors and IR35
If you engage someone through their own company rather than as an employee, consider the off-payroll working (IR35) rules. In the public sector and for medium or large private-sector clients, the hiring business must assess the worker's status and, if they are effectively an employee, operate PAYE accordingly. For small private-sector clients, the worker's own intermediary company usually remains responsible for IR35 compliance. Misclassifying contractors can lead to back-tax and penalties, so check status carefully.
7. Right to work, a non-tax must-do
Separately from tax, you must complete a right-to-work check before employment starts (to avoid the illegal-working civil penalty). It's not a tax form, but it's essential at the hiring stage.
Practical checklist
- Register for PAYE and run RTI (FPS each payday).
- Get a P45 or complete the starter checklist for the tax code.
- Issue P60s yearly and report P11D benefits; give a P45 to leavers.
- Handle auto-enrolment, minimum wage and employers' liability insurance.
- Consider IR35 for contractors and complete a right-to-work check.
Key takeaways
- Hiring triggers PAYE: register as an employer and report pay via RTI (FPS) on or before each payday.
- Use the new starter's P45 (or the starter checklist) to set the right tax code; issue P60s annually, report P11D benefits, and give P45s to leavers.
- Also handle auto-enrolment, minimum wage and employers' liability insurance, and consider IR35 for contractors (the obligation to assess status and operate PAYE applies to public sector and medium/large private-sector clients; small private-sector clients are generally not responsible).
- Complete a right-to-work check before employment starts (separate from tax).
Sources
- HMRC PAYE and Real Time Information (RTI) rules (employer registration; FPS; P45/P60/P11D; starter checklist)
- Off-payroll working (IR35) rules; National Minimum Wage Act 1998; Pensions Act 2008 (auto-enrolment)
- Immigration, Asylum and Nationality Act 2006 (right-to-work checks); Employers' Liability (Compulsory Insurance) Act 1969
--- This article is general information about the law of England & Wales as at 2026, not legal or tax advice. For advice on your circumstances, consult a qualified accountant or solicitor.