PAYE? Should I be registered

[Easysnr]

In summary, we incorporated by husband's sole trader business on 1st Nov with a year end of 31st March, he as MD and me as company secretary. We both had previous sole traderships and due to allowances already used/ lack of business funds no payments were taken from the business as wages until Jan 18th 13. I paid myself £144 weekly and then from 5th April 13 we have both been drawing £148 week. On top we have taken a dividend payment of £1500 each early April from the previous years profits. We both take reimbursement for mileage claims also but both currently below the taxable limit.

We only recently took an accountant and at last look didn't seem to think we needed to register the company as an employer/ us as employees but from HMRC's blurgh im not sure he's right, though deciphering it isn't too easy!

Assuming we needed to be PAYE registered on both counts, how to I account for the previous payments that haven't been reported are there fines or penalties?

Perhaps I need to look for a new accountant as other advice he has given me seems to be a bit far out as far as tax avoidance goes and my faith is wavering a little!

Thank you for your advice in advance

 

[StevensOnln1]

You need a PAYE scheme if you are paying any employees at or above the NI Lower Earnings Limit (currently £109 per week).

 

[RTI-man]

I assume there wasnt any tax payable from these payments? If not, then, in my (non legal) mind the only thing youve done wrong is not yet file your EOY Return for last year, the fact you're not yet set up as a PAYE scheme may save you. Goto https://online.hmrc.gov.uk/registration/options to register

 

[loveaccounts]

Yes, there shouldn't be fines for last year if there's no tax due, but you do need to register and sort it out asap (it is quick and easy online) and make sure your payroll is RTI compliant.

Before the rules changed you had to register as an employer if you paid less than £109 a week, so I don;t know where your accountant was getting his info from! The HMRC guidance specifically refers to small limited companies with director-only employees!

Hope that helps

 

[Easysnr]

Thank you everyone for your help, that was what I had gathered from reading.

There is no tax to pay not on the wage elements in any event. As I said think it's time to get a new accountant. I feel other than register the company he has given nothing but bad advice and rather than give the security I expected I? feel like im up a creek with no paddle! Best start checking out other compliance issues and have it right in my own mind.

Any suggestions on how I should deal with the payments that haven't been reported?

 

[loveaccounts]

Because otherwise you'll end up in a real-life "Computer says no" situation, I would register first so you can get an employer PAYE reference number, then call the employer helpline (quoting this number) and explain that you need to do a 2012/13 annual return, although there's no tax to pay. They will either send you a paper form to fill in or you will be able to do it online.

The figures you need are the gross pay per employee (because there's no deductions), which should be automatically produced if you are using software. If you do have software it should be relatively easy to configure for online RTI, which basically just reports your payroll to HMRC monthly instead of annually.

Last thing, you might want to take advice on dividend timing (depending on earning levels) so as to reduce the impact on tax payments.

Hope that helps

 

[Tom McClelland]

Yes, there shouldn't be fines for last year if there's no tax due, but you do need to register and sort it out asap (it is quick and easy online) and make sure your payroll is RTI compliant.

Before the rules changed you had to register as an employer if you paid less than £109 a week, so I don;t know where your accountant was getting his info from! The HMRC guidance specifically refers to small limited companies with director-only employees!

Hope that helps

Why would the minimum penalty of £100 for failure to report P35/P14 by May 19th be waived? I'm not saying you're wrong, but I'm not aware of the concession that you're citing, so it would be useful if only from the point of view of being able to educate our users if this issue arises.

 

[loveaccounts]

Actually I've not had anyone be late for 12/13 and if the penalty rules changed in line with personal returns, then the fine may indeed be payable, rather than excused as in previous years. Does anyone have experience of this?

There may be ways and means though.

 

[RTI-man]

Why would the minimum penalty of £100 for failure to report P35/P14 by May 19th be waived? I'm not saying you're wrong, but I'm not aware of the concession that you're citing, so it would be useful if only from the point of view of being able to educate our users if this issue arises.

Apologies Tom I didn't make my original post very clear, what I meant was as there were no payments due then they haven't failed to pay on time etc. I think the fact the scheme hasn't been registered yet MAY help as far as the late filing penalty is concerned.

If you are fined though then I'd claim it back from the accountant, dismal advice from him.

 

[Tom McClelland]

I doubt that leaving it too late to register as an employer would be regarded as an acceptable excuse for late filing. But I could be wrong. As long as the return is filed online by June 19th the penalty is limited to £100, but the process of obtaining filing codes etc can take a while so the OP (or accountant) had best get skates on.

 

[David Griffiths]

I can't be certain on PAYE without checking, but I suspect that if you haven't registered as an employer there would be no late penalty for failing to file a P35 by 19 May.

Drawing a parallel with self assessment, the £100 penalty for not filing a return by 31 January is only if the return is not filed following issue of a notice to do so by HMRC. No notice, no penalty for not filing. If you don't notify HMRC that you need a self assessment retun, you are in the realms of a failure to notify penalty, which are nearly all geared to the tax paid late. So if you don't owe any tax, there probably wouldn't be any penalty.

I'd expect the same to apply to PAYE, certainly under the old rules, but as I say I can't be totally certain.