PAYE

[C1403]

Hello

Not sure if this is posted in the correct section. If not please feel free to move.

We are a small business and plan to employ a part time employee for admad who will be paid £150 per week (which is under the Primary Threshold and above the LEL)

Do I need to register as an Employer and submit real time PAYE . There are no other employees

I am under the impression that if they earn under the PT (or is it the LEL?) and they have no other job then we wouldn't need to register?

Thanks

 

[Scalloway]

You need to register for PAYE if the employee is being paid over the LEL of £118 per week as they will be credited with NI contributions even though neither of you pays anything.

 

[A K]

You need to register for PAYE if the employee is being paid over the LEL of £118 per week as they will be credited with NI contributions even though neither of you pays anything.

Hi, I know this isnt directly related but can you help me with this problem.

If I paid myself £12,500 at the end of the tax year, lets sat March, from my Ltd company as a director, would the NICS be the same or more compared to if I paid myself monthly £1041.66 from the beginning of the year?

Obviously the NICS may be larger at the moment of payment, as you paid £12500 in one payment, but surely HMRC will take into account your total income during the tax year and give you a tax refund down the line?

Does it make a difference if it is being paid to a director or a regular employee?

Thanks

 

[SteveHa]

You need to get a new starter form completed. If they tick option C (or none at all), then the tax code is BR and you will need a PAYE scheme for the tax deductions.

If they tick A or B then no PAYE required.

 

[Scalloway]

If I paid myself £12,500 at the end of the tax year, lets sat March, from my Ltd company as a director, would the NICS be the same or more compared to if I paid myself monthly £1041.66 from the beginning of the year?

Directors' NI Contributions are worked out from their annual earnings rather than from what they earn in each pay period.

https://www.gov.uk/employee-directors

 

[Newchodge]

but surely HMRC will take into account your total income during the tax year and give you a tax refund down the line?

If you pay yourself 12,500 in March 2019 there will probably be tax to pay, unless you have an increased tax free allowance above the standard 11750. If you mean March 2020, why do you think there should be a refund?
NIs will be the same whether you pay monthly or annually.

 

[NicoJ]

Hi, I know this isnt directly related but can you help me with this problem.

If I paid myself £12,500 at the end of the tax year, lets sat March, from my Ltd company as a director, would the NICS be the same or more compared to if I paid myself monthly £1041.66 from the beginning of the year?

Obviously the NICS may be larger at the moment of payment, as you paid £12500 in one payment, but surely HMRC will take into account your total income during the tax year and give you a tax refund down the line?

Does it make a difference if it is being paid to a director or a regular employee?

Thanks

Yes it does. NIC is calculated accumulatively for a director so the NIC would be the same whether you paid monthly or annually. For an employee, unless it's an annual scheme, you would pay higher NI on a one off payment compared to a monthly payment.