Managing a PAYE scheme can be challenging and unless you understand the process you could be liable for legal action.
If you employ anyone earning over £118 per week you need to register for PAYE to collect Income Tax and National Insurance. For anyone earning under £118 per week, accurate payroll records still need to be kept.
If you have just launched your new business and you are taking on new employees you must contact HMRC. They will provide you with everything you need to set up a PAYE system including a variety of forms and online basic PAYE tools that help you to calculate the amount of Tax and National Insurance due.
There are plenty of guides available but its advisable that you hire an Accountant to make sure you get it right. You could be subject to an HMRC compliance visit for missing or incorrect data, which could be costly for underpayment over time.
An Accountant will ensure the correct process is followed and the right forms are completed avoiding potential HMRC fines.
The PAYE system is a real time system (RTI) and you are required to make regular payroll submissions detailing all payments and deductions made from employees each and every time they are paid. This also includes any tips and bonuses as well as student loans and pension deductions.
As an employer, you are required to submit two main returns; a Full Payment Submission (FPS) and an Employer Payment Summary (EPS). An FPS needs to be submitted to the HMRC on or before the employee is paid, even if an employee falls below the £118 per week bracket.
An EPS is required in certain circumstances, your Accountant will have full knowledge of when this is applicable, and includes the following:
You are required to stay compliant and report accurately and on time. Avoid the risk and contact us today for an informal chat.