Paye Registration

Paye Registration

PAYE is a tax collection procedure applied by HM Revenue and Customs’ (HMRC) to collect Income Tax and National Insurance contributions. Employers are required to make deductions for PAYE and NIC when paying to employees above than minimum threshold. Under the system, employers are also required to make other deductions like student loan repayments or pension contribution (if any).

Registration

Minimum Threshold

If you are paying £112 or more a week to any of your employees, you must have to register for PAYE, however, you are not required to register either if you are paying less than the limit i.e. £112, having employee aged under 16 or paying benefits not subject to PAYE/NI. Updated payroll records must be kept either you are registered employer or not. Payments subject to PAYE/NI include salary and wages, bonuses, commissions, golden handshake, cash vouchers and share options or share incentives of quoted companies etc.

Information Required for PAYE Registration:

HMRC has introduced online PAYE Registration system, which requires the following information for Paye Registration purpose

  • Business Name
  • Explanation of your company’s main business activity
  • Trading address of the business (not the registered office).
  • Director’s Full Name
  • Director’s NI number
  • Director’s Current Home address
  • Date when first salaries are expected to be paid.

Separate registration is required even if a person is already registered as an employer. Separate online login is issued to employers to enter the PAYE.

Reporting:

Employers are required to report HMRC regarding payments and deductions of employees on each payday, employers also have to report major changes e.g. joining of a new employee, conversion of an employee to director etc.

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Paying HMRC:

You can view and pay the outstanding amount through an online portal and can pay usually every month. However, employers can arrange to pay their liability on a quarterly basis if paying less than £1,500 a month.

Penalties:

HMRC impose penalties on late filing of full payment submission (FPS), you fails to send the expected number of FPSs, inaccurate reports, not submitting a FPS in a tax month when you not paying your employee (as it is compulsory to file FPI whether you are paying or not in any tax month). Amount of penalty depends upon the number of an employee under the payroll.

HMRC also impose penalties in case of late payments which depends upon the number of months elapsed from the due date.

Deregistration:

It is important to ‘sign off’ from PAYE when stopping to act as an employer. The best way is to write HMRC or use an online form to report that you have stopped deducting PAYE, as soon as this happens.

You must have to deduct and pay the final liability within 17 days of cessation and inform HMRC the ‘’Date’’ from you stopped your PAYE scheme.

HMRC Online Services:

Services available at HMRC’s online portal

  • Registering for PAYE
  • To view payments you owe HMRC
  • To view submitted payrolls
  • To view interests, penalties, and credits applied by HMRC
  • Submitting payroll reports
  • Viewing tax codes and notices
  • Submitting appeal waive a penalty
  • Getting alerts from HMRC
  • Subscribing for alerts and notices
  • Deregistering for PAYE

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Business Name
Explanation of your company’s main business activity
Trading address of the business (not the registered office)
Director’s Full Name
Director’s NI number
Director’s Current Home address
Date when first salaries are expected to be paid
Phone Number

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