PAYE for 2 part time roles

[Daryl89]

Hi all! I have a question that I hope you will be able to help me with! I’m looking to take on someone to help with admin and online aspects of my business. In the below scenario I am company B and am wondering if I need to be PAYE registered to pay him below the LEL.

Here is the scenario,

John is paid £719 a month from limited company A for part time admin work. (Company A is PAYE registered as is required in order to pay above the LEL) would another limited company (company B) need to register for PAYE to pay John £512 per month (below the LEL), also for part time admin work?

I understand that in that scenario John would be required to submit a self assessment return and pay tax on the amount over the tax allowance. But my understanding is that neither he nor either business wouldn’t be required to pay any NI contributions.

Thanks!

 

[NicoJ]

Yes you will, as it's his second job you will be required to operate a BR code meaning that he will pay 20% tax on all his earnings.

You will need a PAYE scheme to pay over the deductions you've taken from him.

You are correct in regards to the NI situation.

 

[Daryl89]

Yes you will, as it's his second job you will be required to operate a BR code meaning that he will pay 20% tax on all his earnings.

You will need a PAYE scheme to pay over the deductions you've taken from him.

You are correct in regards to the NI situation.

Thanks, and then I assume that if he has over paid tax he would be due a rebate at the end of the year?

 

[Scalloway]

Yes HMRC will refund any overpaid tax.

 

[Newchodge]

Thanks, and then I assume that if he has over paid tax he would be due a rebate at the end of the year?

Or he can contact HMRC and ask that his tax free allowance is apportioned appropriatly between his two jobs.

Logically, both employers would be required to be PAYE registered and submit RTI even if he was their only employee and was paid in both jobs below LEL. However I am not sure, off hand, how the first employer would be aware that they needed to be registered (assuming a slightly different scenario in which the 2 employers were unconnected.

 

[DWS]

Are Company A and Company B associated?

 

[Daryl89]

Are Company A and Company B associated?

No, the scenario is that my father in law has a Ltd company, he has someone that helps him part time and is very good and I could use some similar help and considered taking him on for a day a week.

 

[SteveHa]

I understand that in that scenario John would be required to submit a self assessment return.....Thanks!

Why do you assume that? The only requirement to complete a self-assessment Tax Return is if HMRC issue a notice to file under TMA1970 S.8. The only requirement to notify chargeability to HMRC (thus giving them information to decide whether or not a Tax Return is required) is at TMA 1970 S.7, which in a nutshell, requires a taxpayer to notify income giving rise to a tax liability which is not subject to deduction at source. This, effectively, removes PAYE income from the S.7 requirement.