What is a PAYE scheme?
If your business employs staff, you will likely need to register for a PAYE scheme. PAYE stands for Pay as you Earn and is the HMRC’s system for collecting Income tax and National insurance from employees. This system ensures that the tax revenue deducted from your employees each month reaches the government as soon as they start earning. Along with collecting the tax and National insurance, PAYE is also used to collect things such as Student loans repayments and the apprenticeship levy. It is the responsibility of the employer for deducting PAYE from their employees and sending these payments to the HM Revenue and Customs.
How do I Set up a PAYE scheme?
Before you can begin to pay your employees, you will need to register with the HMRC as an employer and set up your PAYE scheme. You will need to ensure you can provide the HMRC with the relevant information to enable them to set up the scheme such as:
- Company details, such as name and address
- Nature of your business
- The director’s personal information such as full names and NI numbers
- The number of employees that will be on the payroll
- The payroll frequency
How long does it take to set up a PAYE scheme?
Once you have registered as an employer with the HMRC, they will issue you with your PAYE reference number and accounts office reference number, and you will need both of these when the payroll is processed and when paying your PAYE to the HMRC each month. It can take up around 5 working days for the HMRC to issue your references and you cannot make your monthly returns or payments to the HMRC without these.
When is my PAYE payment due?
You must ensure that your PAYE bill is paid to the HM Revenue and Customs on time. This is the 22nd of the next tax month if you pay monthly or 22nd after the end of the quarter if you pay quarterly. You can make a transfer from your bank account directly to the HMRC but must ensure that you use the Accounts office reference as the payment reference so that the HMRC can allocate your payment to the correct account. If you are set up with our BACS facility we can make these payments for you automatically each month.
How can we help?
If you use Menzies Outsourced payroll service, we can manage everything for you. We will set up a new PAYE scheme with the HMRC and once this is in place. We can provide you with an ongoing service to ensure that payroll is processed, and deductions are made in line with the latest government legislation each month.
As part of our fully managed payroll service, we will register as your agent for PAYE with the HMRC. This will allow us to provide you with the following assistance:
- We are able to liaise with the HMRC on your behalf if a query arises
- Download your employees tax code changes directly into the payroll system
- Download any changes to student loan deductions directly into the payroll system
- Check your PAYE annual statement online to see any outstanding payments
- Appeal any penalty you receive from the HMRC relating to PAYE
- We receive alerts from the HMRC if you report or pay your PAYE late