Originally posted by Contreras
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Previously on "Worth registering my new Ltd Co for PAYE?"
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Originally posted by Wanderer View PostWow, so you had an argument with the person on the Employer Helpline and got them to contradict what HMRC's written guidance says.
Good luck with that one but I can't help but think that it will come back and bite you.
Basically what GazCol and UKCA said (except the piece about paying family members to clean your office ).
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Originally posted by Wanderer View PostWow, so you had an argument with the person on the Employer Helpline and got them to contradict what HMRC's written guidance says.
Good luck with that one but I can't help but think that it will come back and bite you.
If you're a new company and you have no employees earning above the LEL threshold, you do not have to be PAYE registered and as a result, do not have to do RTI submissions.
If you're an existing company, currently have no employees earning above the LEL threshold, but have previously, you need to deregister from PAYE otherwise you have to do RTI submissions.
The HMRC guidance quoted is in respect to companies that have employees paid above the LEL threshold and employees paid under the threshold. As these companies have to be PAYE registered submissions have to be done for all employees.
Further information here.
That's the biggest problem with HMRC's web
page. The guidance doesn't make sense if you look at one page in isolation. You would think, from Craig's link that it was black and white. However that is only advice for current PAYE scheme operators.
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Originally posted by Craig at Nixon Williams View PostExtract from here: HM Revenue & Customs: What to report
"You need to report the payment details of all employees you pay, no matter how much you pay them - even those earning below the Lower Earnings Limit (LEL), or those paid just once a year."Originally posted by UK Contractor Accountant View PostI have had this argument out with the Employer Helpline which confirmed that if all you employees are earning less than the LEL limit you do not need a PAYE scheme in place or report under RTI (assuming you hold signed P46's for all staff!).
Good luck with that one but I can't help but think that it will come back and bite you.
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Originally posted by Craig at Nixon Williams View PostI see your point now.
One benefit of having a PAYE scheme allows you to sort out your tax during the tax year rather than waiting until the self-assessment is submitted. He will have paid tax on his prior earnings and will get a refund of this if staying below the personal allowance – this will come quicker if he uses a PAYE scheme.
If he is going to claim for certain expenses then these will need to be reported on a P11d and a PAYE scheme will need to be opened in order to complete this.
Craig
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Originally posted by UK Contractor Accountant View PostI have had this argument out with the Employer Helpline which confirmed that if all you employees are earning less than the LEL limit you do not need a PAYE scheme in place or report under RTI (assuming you hold signed P46's for all staff!).
It takes just 1 employee earning above the LEL to bring all the other employees under RTI including the £5 a week you pay to your son/daughter for cleaning your office (that's if you employ family members in your ltd co).
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Originally posted by Craig at Nixon Williams View PostExtract from here: HM Revenue & Customs: What to report
"You need to report the payment details of all employees you pay, no matter how much you pay them - even those earning below the Lower Earnings Limit (LEL), or those paid just once a year."
It takes just 1 employee earning above the LEL to bring all the other employees under RTI including the £5 a week you pay to your son/daughter for cleaning your office (that's if you employ family members in your ltd co).
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I see your point now.
One benefit of having a PAYE scheme allows you to sort out your tax during the tax year rather than waiting until the self-assessment is submitted. He will have paid tax on his prior earnings and will get a refund of this if staying below the personal allowance – this will come quicker if he uses a PAYE scheme.
If he is going to claim for certain expenses then these will need to be reported on a P11d and a PAYE scheme will need to be opened in order to complete this.
Craig
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Originally posted by Craig at Nixon Williams View PostExtract from here: HM Revenue & Customs: What to report
"You need to report the payment details of all employees you pay, no matter how much you pay them - even those earning below the Lower Earnings Limit (LEL), or those paid just once a year."
I'm posting from my phone at the moment but I will link to HMRC when on an easier device to post from.
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Originally posted by Craig at Nixon Williams View PostExtract from here: HM Revenue & Customs: What to report
"You need to report the payment details of all employees you pay, no matter how much you pay them - even those earning below the Lower Earnings Limit (LEL), or those paid just once a year."
I think GazCol's point was that in some situations you don't need to register for PAYE, in which case would the above even apply? HMRC's guidance is - as ever - as clear as mud on this.
Over here, it says this:
Before you pay your first employee for the first time, you must check whether you need to operate PAYE. The guide 'How to register as an employer' tells you when you need to register and how to register.
As soon as you first employ someone, you will need to register as an employer with HMRC if any of the following is true:
you're paying them at or above the PAYE threshold
you're paying them at or above the National Insurance Lower Earnings Limit
the employee already has another job
they are receiving a state, company or occupational pension
you're providing them with employee benefits
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Thanks all, I'm trying to get as much info as I can being new to all this.
Originally posted by northernladuk View PostYou are going to get an accountant aren't you?
But other than doing a flat rate VAT return online (I think I can handle this myself), I don't know if I'll need an accountant at least until next year when I find out if my contract will be extended or if I start a new role. This was why I asked about PAYE as for that I think I'd need to get an accountant in from the start and with the money I'll be earning to begin with I'd prefer to avoid this if possible (no offence to any accountants reading this!)Last edited by rm55; 12 September 2013, 15:25.
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Originally posted by Craig at Nixon Williams View PostIt wouldn't cost him anything in NI - the NI threshold per employment not overall.
Craig
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Originally posted by GazCol View PostThat's not right, an RTI submission only needs to be done if you're PAYE registered and you do not have to be PAYE registered if all employees earn below the LEL threshold.
"You need to report the payment details of all employees you pay, no matter how much you pay them - even those earning below the Lower Earnings Limit (LEL), or those paid just once a year."
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Originally posted by Craig at Nixon Williams View PostYes, under the RTI rules each time an employee is paid a submission needs to me made to HMRC.
If he is doing it himself then he could wait until March and pay it all in one go so that the number of submissions is kept to a minimum. I presume that he would be registering next year anyway!
Craig
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Originally posted by TheCyclingProgrammer View PostYou said he could pay himself another £2276 without incurring any tax. Thats not true - it would cost him nearly £450 in NI contributions (employee and employer). Even though there is CT relief on employer contributions, it would still be costing him more money.
Craig
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