Short answer
Register as an employer with HMRC as soon as you know your first payday, ideally a few weeks in advance, then run payroll from day one using a starter checklist, submitting a Full Payment Submission on or before every payday.
Payroll & employment
How do I set up director payroll in my first year of trading?
Register as an employer, set the first payday, and file your opening RTI submission correctly. What a new company needs before paying its first director salary.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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Register as an employer with HMRC as soon as you know your first payday, ideally a few weeks in advance, then run payroll from day one using a starter checklist, submitting a Full Payment Submission on or before every payday.
01
Getting the timing right
02
The first submission
Getting the timing right
HMRC registration cannot usually be backdated more than a limited period and takes several working days to process, so it needs to happen before the company incorporates its first payroll run rather than after. Most new directors set the first payday for the end of the month following incorporation, giving time for references to arrive.
Once registered you receive a PAYE reference and an Accounts Office reference, both needed to file returns and pay HMRC. Choose RTI compatible software from the start rather than trying to bolt it on retrospectively once a few months have already passed.
The first submission
Because a new director usually has no P45 from a previous employer relevant to the new company, a starter checklist sets the tax code, normally 1257L on a cumulative basis from the first payday of the tax year. The first FPS reports this starter information alongside pay, tax and NIC.
If the first payday falls partway through the tax year, cumulative tax bands still apply as if the director had been paid since April, which often produces no tax due on a modest opening salary until several months in.
Before you act
Rates, thresholds and deadlines quoted here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.
Local help
Talk to a limited company accountant near you
We work with company directors across London and Surrey from our office at 12 London Road, Morden, London SM4 5BQ. Pick your area, or send the form below and we will call you back.
Frequently asked
How do I set up director payroll in my first year of trading?: questions directors ask
Can I set up payroll before the company has traded?
Yes, registration is based on the company existing and expecting to pay someone, not on trading history.
What if my first payday has already passed unregistered?
Register immediately and run the payroll retrospectively; HMRC expects prompt correction rather than delay.
Do I need payroll from day one if I take no salary yet?
No, registration only becomes necessary once you decide on a first payday.
What records are needed for how do i set up director payroll in my first year of trading?
Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.
How much does help with how do i set up director payroll in my first year of trading cost?
The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.
Can you take over how do i set up director payroll in my first year of trading from another accountant?
Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.
Can how do i set up director payroll in my first year of trading be handled online?
Yes. We work through secure cloud records, scheduled reviews and digital approvals, while keeping a named team available by phone, video call and email. Clients can also visit our Morden office by appointment.
Which accounting software works best for how do i set up director payroll in my first year of trading?
We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.
What tax deadlines matter for how do i set up director payroll in my first year of trading?
The relevant calendar may include annual accounts, Corporation Tax payment and return dates, confirmation statements, VAT returns, payroll submissions and Self Assessment. We map the dates from your company year end and registrations.
Is this how do i set up director payroll in my first year of trading guidance personal tax advice?
No. This page explains general UK rules and common accounting treatment. Your facts, contracts and wider tax position must be reviewed before you rely on a conclusion.
Included approach
Organised, explained, on schedule.
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Check the current rules
Use official information as your reference point.
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.