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Registering PAYE (Pay As You Earn)

Posted 24 Sep 13

When you first register a company, the question next is registering PAYE.

When you're ready and have set up your business, there are so many answers to find and is registering PAYE necessary?

According to the HMRC, registering for PAYE is only required if the employee has a second job; they are being paid above the PAYE threshold or the LEL (Lower Earnings Limit); the person is in receipt of employee benefits. As a note, the LEL for the 2013-2014 tax year is £109 per week or £5,668 per annum.

So do you need to register, as an employer?

In smaller companies where the Director receives an allowance as a monthly salary and dividends, the HMRC recommends that there is no need to register unless the above points are met. That is, if anyone in your company is receiving payments above the LEL you have to register PAYE and pay by the 19th of each month.

You have a responsibility to register PAYE and send your records to HMRC every time you pay an employee. If the person working with you is self employed, it is up to that individual to pay National Insurance contributions and tax, however as an employer you must register PAYE when paying above the LEL and keep records to submit every time they are paid.

Your PAYE covers salary, overtime, any bonuses or tips, maternity, paternity or adoption payments, redundancy payments (unless they are tax exempt), non-cash payments (vouchers/shares), commission, expenses and any other benefits (company cars/private insurances).

Whilst varying procedures apply to each individual, how to report payroll information can be fairly straightforward if you have the right tools and software in place.

It is your responsibility to make deductions also which includes but are not limited to student loans, pension contributions and employee loan repayments.

You will also be required to issue payslips to your employees every time you pay them and we are able to assist with the process.