Running HR without an HR department in the United Kingdom
Reviewed by Mellow Editorial Team, HR & payroll content team
Running HR without a dedicated HR department is entirely manageable for most small businesses — provided you understand your legal obligations, build a few simple processes, and know when to get outside help.
Know your baseline legal obligations
Employment law in the UK applies to you from the moment you hire your first member of staff. You do not need an HR team to comply with it, but you do need to know what it requires.
Every employee needs a written statement of particulars on or before their first day. This covers pay, hours, holiday entitlement, notice periods and other key terms. Since the Employment Rights Act 2025 strengthened day-one rights, employees also have protections that previously required a qualifying period — so there is less runway to get things wrong before obligations kick in.
Beyond contracts, you must:
- Register as an employer with HMRC before your first payday
- Operate PAYE and submit payroll data to HMRC under Real Time Information, sending a Full Payment Submission on or before each payday
- Auto-enrol eligible employees into a pension scheme, contributing at least 3% of qualifying earnings as the employer
- Issue a P60 to each employee by 31 May after the end of the tax year, and a P11D by 6 July if you provide taxable benefits
- Provide a minimum of 5.6 weeks' statutory annual leave (28 days including bank holidays for someone working a five-day week)
None of this requires a specialist — but it does require attention and a reliable system.
Build a simple document library
Most HR risk in small businesses comes not from ignorance of the law but from not writing things down. A lean document library protects you and gives employees clarity.
You need, at a minimum:
Employment contracts. Use a template that covers the statutory requirements. Review it when employment law changes rather than assuming last year's version still holds.
A disciplinary and grievance procedure. The ACAS Code of Practice sets the standard. A brief written procedure that follows the Code protects you at employment tribunal and tells employees how issues will be handled.
A sickness absence policy. This explains how employees should report absence, how Statutory Sick Pay applies, and how you handle longer-term ill health.
A holiday policy. Confirm how leave is requested and approved, how carry-over works, and how untaken leave is handled when someone leaves.
Keep these documents somewhere every employee can find them — a shared folder works fine. The goal is consistency, not paperwork for its own sake.
Run payroll properly
Payroll is the area where small employers most commonly run into trouble. Errors are easy to make and can be costly to fix, particularly once HMRC becomes involved.
The core mechanics: employees pay income tax at 20% on earnings above the £12,570 personal allowance (40% above the higher-rate threshold, 45% above the additional-rate threshold). Employee National Insurance is 8% of earnings in the main band, dropping to 2% above the upper limit. You as the employer pay 13.8% on earnings above the secondary threshold.
You must submit a Full Payment Submission to HMRC on or before every payday — not monthly in arrears, not whenever it is convenient. Late submissions attract penalties.
If you are doing this manually, the margin for error is significant. Most small employers use payroll software or a bureau. If payroll is one of the tasks you genuinely do not have capacity to handle well, how Mellow runs payroll across six countries on one platform is worth reading as a reference point for what a managed approach looks like.
Handle people issues consistently
Without an HR department, the temptation when a problem arises — a conduct issue, a complaint, a performance concern — is to deal with it informally and hope it resolves. Sometimes it does. Often it does not, and an informal approach that is poorly documented can make a formal resolution much harder later.
The principle to apply is: treat similar situations similarly, follow the ACAS Code, and write things down. You do not need an investigation committee. You need a record of what was said, what was agreed, and what the outcome was.
For anything involving potential dismissal, it is worth paying for an hour of employment law advice before you act. The cost is small relative to the exposure from an unfair dismissal or discrimination claim.
Know when to bring in outside help
Doing HR yourself does not mean doing it alone in every situation. There are three moments when external input is worth paying for:
1. When you hire your first employee — get your contract and policies reviewed by an employment solicitor or HR consultant.
2. When someone raises a formal grievance or you need to dismiss — follow the ACAS Code, and consider professional guidance before the process concludes.
3. When your headcount grows — what works at five people rarely works at twenty. Revisit your processes before they become a source of friction.
The rest of the time, consistent application of simple, documented processes will cover most of what you need.
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