| When you engage someone to work for you, you | | | | completes an excel copy of the compulsory HMCE |
| become their employer. Every employer operating a | | | | forms significantly easing the administrative burden. |
| PAYE scheme must have an understanding of the | | | | Paying Employees |
| HMCE payroll essentials. Payroll essentials that payroll | | | | Employees must be paid the national minimum wage |
| software packages satisfy include both the knowledge | | | | which for adults was raised on the 1st October 2007 |
| to correctly calculate income tax and national | | | | to £5.52 per hour. Every employee must receive a |
| insurance plus legal obligations to each employee. | | | | payslip that shows the amount of income tax and |
| When should an Employer Register for PAYE | | | | national insurance deducted from the gross pay. In |
| An employee is anyone who works on a full time, part | | | | addition every employer must also calculate the |
| time or casual basis for the business and includes | | | | employer's national insurance contribution. If you are an |
| company directors. Employers should register as soon | | | | employer and not operating a payroll software system |
| as possible when a qualifying employee is appointed | | | | such as the DIY Accounting Payroll Software then you |
| and may register up to four weeks prior to the first | | | | must design a payslip to give to your employees to |
| employees pay day. You should register as an | | | | satisfy legal requirements. |
| employer and operate a PAYE system if your | | | | HMCE Payroll Forms |
| employee already has other employment, or if the | | | | P11 Employees Deductions Working Sheet |
| employee's earnings are equal to or above the PAYE | | | | The working paper is a record of the weekly or |
| threshold. The PAYE threshold for 2007-08 is earnings | | | | monthly pay for each employee and the income tax |
| of £100 per week or £435 per month at which | | | | and national insurance deductions. |
| point income tax and national insurance deductions | | | | P14 End of Year Employees Deductions Summary |
| may be required. These limits include the value of any | | | | Summary of the employee income tax and national |
| benefits in kind that may be paid. | | | | insurance deductions recorded on the P11 deductions |
| Employer Registration Information Required | | | | working sheet |
| Generally the information to be provided includes the | | | | P35 Annual Employers Return |
| business name, trading address, type of business, | | | | Summary detailed by employee of the annual totals of |
| name and address of the employer, national insurance | | | | income tax and employee's national insurance |
| number and tax office reference of the employer, | | | | deductions and employers national insurance liability |
| contact telephone number and email address if | | | | P45 Details of Employee Leaving |
| applying by email., In addition details will be required of | | | | Only available from the Employer's helpline the P45 is a |
| the likely number of employees, frequency of payment, | | | | certificate of the amount paid to the employee and the |
| the date the first employee was appointed and the | | | | income tax deducted during that employment. Every |
| first payment date. Also have available the address | | | | employee that leaves the employers employment |
| where the payroll records will be kept and the contact | | | | should be issued with a P45. |
| details of the person responsible for the payroll. Where | | | | P60 End of Year Employees Certificate |
| partners are involved details of each partner's names, | | | | The P60 is a certificate of an employees total |
| addresses, national insurance numbers and tax office | | | | earnings and total income tax deducted during the tax |
| references will be required and the LLP number for | | | | year including previous those of previous employers |
| Limited Liability Partnerships. Limited Companies will be | | | | and also the amount of national insurance deducted by |
| required to supply the address of the company's | | | | the current employer and should be issued to every |
| registered office, date of incorporation and company | | | | employee the employer has at the 5th April each year. |
| registration number plus details of the directors; names, | | | | Each of these HMCE PAYE forms are automatically |
| addresses, contact telephone numbers, national | | | | completed by the DIY Accounting payroll software |
| insurance numbers, tax office references | | | | which produces excel copies of the HMCE forms |
| How to register as a PAYE Employer | | | | making the package highly suitable for both |
| Employers can register for PAYE online at the HMCE | | | | inexperienced employers and those wishing to minimise |
| website. Click Employers - Register as an Employer - | | | | the administrative burden payroll can place on an |
| First steps as an Employer - scroll down the page until | | | | employer. |
| you can click email which then presents you with online | | | | PAYE Payments and Online Bonuses |
| registration form to complete and send. Alternatively | | | | Deductions of income tax, employees national |
| contact HMCE Employer Helpline at 0845 6070 143. | | | | insurance and employers national insurance must be |
| PAYE and Payroll Records | | | | paid to HMCE each month, the standard final payment |
| Accurate payroll records are essential, full stop. | | | | date being the 19th of the month following the payroll |
| Employers must keep payroll records for both HMCE | | | | month. If monthly payments of income tax and national |
| purposes and employees. The employee records must | | | | insurance deductions including employer's national |
| include the name and address of the employee, | | | | insurance are under £1,500 per month then |
| national insurance number, date of birth, income tax | | | | employers have the option to pay the amount due to |
| code, all payments and benefits made and all | | | | the HMCE on a quarterly rather than a monthly basis. |
| deductions for income tax, national insurance and | | | | Payments of income tax and national insurance to the |
| voluntary deductions. When registering to operate a | | | | HMCE can be made online electronically. At the end of |
| PAYE system immediate arrangements should be | | | | each financial year, 5th April, every employer must |
| made to ensure these records are maintained either | | | | submit the P35 Annual Employers Return .to HMCE |
| by setting up the records yourself using the help and | | | | detailing the amounts paid to each employee and the |
| advice contained in the Revenue CD-ROM provided to | | | | deductions made for income tax, employees national |
| all new and existing employers or employing a payroll | | | | insurance and employers national insurance with the |
| service to produce the records or using a payroll | | | | amount that has already been paid to HMCE in |
| software package. Various payroll software packages | | | | respect of the income tax and national insurance |
| are available with different degrees of complexity. The | | | | contributions. Employers with less than 50 employees |
| DIY Accounting Payroll Software is an ideal solution for | | | | are eligible for a tax free online bonus when the P35 |
| small employers being written on excel spreadsheets | | | | Employers Annual Return is submitted online which has |
| and in addition to producing the deduction calculations | | | | been a tax free £250 and £150 in recent years. |
| and payslips the payroll software also automatically | | | | |