NIC and HMRC Software

[billyboy120]

Hi Guys,

Using the HMRC employer datebase to run my Payroll. I wanted to ask does this work out NIC when you enter pay details each month as well as the tax?

For example, Tax code BR, paying £500 pcm as PAYE, so the software is deducting 20% as tax, but can see that its deducting any natonal insurance??

Thanks in advance,

Billy

 

[Homshaw]

£500 isn't enough to pay NI

 

[Homshaw]

Sorry it is enough for an ordinary employee

 

[David Griffiths]

£500 isn't enough to pay NI

Yes it is. Weekly limit £110 x 52/12 = £476

Unless it's for somebody set up as a dlirector, which isn't mentioned

 

[elaine@cheapaccounting]

have you looked at the P11 tab for NI - there are two sheets of deductions on the CD ROM!

One NI
One Tax

 

[billyboy120]

Hi guys, sorry I didn't mention it is for me as a director. So I'm correct in not paying NIC?

However, I had put £2000 in as a test and still it taxed at 20% but no NI deduction on the P11? Just trying to get my head around how it all works!

Also, it's working out tax on the PAYE earnings even if its below the threshold (I was paying £476 as PAYE last year and not paying tax), so I guess I'm having to pay this and will get it back when I do my tax return?

Thanks again for your help!

 

[David Richards]

Hi guys, sorry I didn't mention it is for me as a director. So I'm correct in not paying NIC?

However, I had put £2000 in as a test and still it taxed at 20% but no NI deduction on the P11? Just trying to get my head around how it all works!

When you are director, you have an annual 'earnings period' - so you don't pay any NI until your NIable earnings reach £5715 for the tax year. (Ordinary employees have weekly or monthly earnings periods instead, so their NI is worked out separately on each individual week or month.)

Also, it's working out tax on the PAYE earnings even if its below the threshold (I was paying £476 as PAYE last year and not paying tax), so I guess I'm having to pay this and will get it back when I do my tax return?

You are using tax code BR, so you pay basic rate tax on everything. There's no tax-free allowance with that tax code. It's normally only used for second jobs etc, where your tax-free allowance has been allocated to your first job.

 

[elaine@cheapaccounting]

Have You Looked At Both Pages Of The P11 For Deductions?

 

[billyboy120]

Thanks David for your help, phoned up and changed my tax code!