If you are a partner in a firm of partnership (which not employ anyone) or a sole trader then there is no any requirement for payroll setup. The reason is that you are designated as a business and not designated as an employee.
If you are a limited company director, then your company is a separate legal entity. If you receive the salary from a company, then this means you are designated as the employee of the company.
How to Set up PAYE Scheme?
To properly setup an online PAYE scheme, the first step for you is to register yourself as an employer on the website of the HMRC. If you wish, then you can also contact the helpline of the employers of the HMRC at 0300 200 3200 and made a request for a new starter pack of an employer.
After the registration, you will require adding all of your employees to the payroll.
Which employees require joining my scheme of PAYE?
If your all employees earn less than the lower limit of earning like £113 every week and none of your employees have any other income source or any other kind of job, then there is no any requirement to enroll those employees on the website of the PAYE. But you require managing the records of the payroll.
If one of your employees earns more than £150 every week and three other employees earn only £95 each week, then you will require setting up online the scheme of the PAYE. In this case, you require adding all your employees to the payroll.
If one of your employees is doing a second job and earns more than the lower limit of earning, then you will need to deduct the National Insurance and PAYE from their earnings. This means you require to set up the PAYE account and need to include all your employees to your payroll.
How to perform online payroll of the PAYE?
When you pay the salary to your employees, then you need to deduct student loan repayments (if applicable), pension contributions, National Insurance Contributions, and Income Tax for the PAYE. The payments of an employee can include parental leave pay, the statutory sick pay of the employee, any bonuses or tips, and wages/salary etc.
Reporting the online scheme of your PAYE
Online PAYE is reported by deploying the Real-time information. This signifies that information related to the payments of the PAYE requires being submitted with the HMRC at the time of making the payments. Prior to that, it can be submitted at the payroll year end.
Before or on the payday, you require reporting about the deductions and payments of every employee. You can select to pay ever four weeks, monthly, fortnightly and weekly your employees, depending upon if you offered a report on every payment.
If you owe the statutory pay and you want to claim any deductions then you require to send them another report.
After you online submit the form of PAYE, you can able to view how much amount of the HMRC you owe. This can be paid each month; you can pay quarterly if you pay the amount less than £1,500 every month. You require contacting the helpline of the payment inquiry to receive the setup.
Various reports of payroll
Apart from your regular payroll, you will require providing information related to the new starters to the HM Revenue and Customs and any modifications to the status. For example, becoming a director of the company or reaching the age of the state pension.
Which records of the PAYE do I require to give to my employees?
You don’t get a bill for the corporation tax paid by you; therefore, it is better if you take the services of an accountant to make sure that no any payment is missed by you and for keeping your records of accounting. Subject to the corporation tax , the profits include the money making by the company from selling assets, investments and doing the business.
See also – How to pay your Corporation Tax Bill
Each payment made to the employee should be followed by a pay slip displaying the tax amount and NICs deducted from the payment, including the year total amount.
After every tax year end, every employee should provide a form of P60 which includes the gross income of the employee. All the deductions made by you and the total net PAYE amount.
For a simple and the successful payroll each month, the Nomisma is a simple to use Payroll software.