Avoiding need to register for PAYE as an employer

Savvy_Sue

cotswoldaccountant wrote: »

So you are absolutely right that you would not need to register if you are paying someone below the tax and NIC threshold - unless they have another job already or have a pension.

If you don't need to register, then it is unnecessary to do so - especially with the RTI requirements for reporting that HMRC is introducing in April.

I'm not going to pretend to be fully up to speed on RTI, but I thought with its introduction then all employers were going to have to send information to HMRC every pay period, for every employee, even if in the past they wouldn't have had to be registered because all employees were under the limits for needing to be declared.

so are employers going to be sending in RTI info without being registered? Or does that mean that ALL employers now need to be registered? I think the OP needs to know ...

jimmo

Savvy_Sue wrote: »

I'm not going to pretend to be fully up to speed on RTI.

I’m not either but I think ypu’ll find that cotswoldaccountant quoted from this which does include references to RTI and newly registered employers are going straight to it.

http://www.hmrc.gov.uk/payerti/getting-started/register.htm

Savvy_Sue

I guess where I'm heading to is what NPU means by "the hassle" of registering with HMRC.

And I think my understanding is that at the very least there WILL be a monthly hassle of submitting RTI to HMRC, even if the employee is paid a pittance, and even if the employee is paid nothing in one particular month (irregular hours, unpaid leave etc).

From my memory of acting as an employer / running payroll, the act of registration is the easy part. And while I could be quite wrong, I think that the monthly submission of RTI is going to be 'interesting' in the early days.

jimmo

Ah! I was trying to answer your question about whether every employer has to register and the answer to that seems to be “No”.

The point I was trying to make was that the HMRC guidance on whether an employer has to register fully takes into account that RTI exists so there is no blanket rule that every employer has to sign up.

NPowerUser

jimmo wrote: »

Ah! I was trying to answer your question about whether every employer has to register and the answer to that seems to be “No”.

The point I was trying to make was that the HMRC guidance on whether an employer has to register fully takes into account that RTI exists so there is no blanket rule that every employer has to sign up.

Thank you for your help.

It seemed an idiotic waste of time if I am only going to pay someone just over 3K a year, with no tax & nic liability with having to notify hmrc.

Savvy_Sue

NPowerUser wrote: »

Thank you for your help.

It seemed an idiotic waste of time if I am only going to pay someone just over 3K a year, with no tax & nic liability with having to notify hmrc.

the thing is, it's not your responsibility to fully determine whether or not your employee has any tax liabilities. They may say "no, I have no other taxable income", but there are two possible problems with that, first that they may not be honest, and second that they may not realise that some other income they have IS taxable.

Also even if they are completely honest and correct atm about their taxable income, situations change, and if you aren't telling HMRC about what you're paying them, then they could end up with a tax bill later.

So in principle I'm a fan of RTI.

If it helps, running payroll for a small number isn't that difficult or time consuming. It just has to be done on time, every time. I used to be paying up to 15 people on a weekly basis, with variable earnings (including nothing!), and I did it manually. For one person it would be a doddle, especially if they were earning the same amount every week.

Or you could contract it out, but for one person it would hardly be worth it.

Mind you, as well as the mechanics of payroll, you need to be aware of - and you'd need to be aware of all this even if you didn't have to register with HMRC - all your statutory responsibilities: holiday pay, Statutory Sick Pay, emergency dependent's leave, written t&c of employment etc etc etc.

NPowerUser

I might just give them a form P46 to sign to say this is their only or main job and keep it myself.

I will not be registering for PAYE when the only employee I have is not liable to any taxes and the HMRC website says I don't have to.

Savvy_Sue

NPowerUser wrote: »

I might just give them a form P46 to sign to say this is their only or main job and keep it myself.

Fair enough, but what will you do if / when their situation changes? eg they get another job which pays more than yours, they start drawing a pension etc.

NPowerUser wrote: »

I will not be registering for PAYE when the only employee I have is not liable to any taxes and the HMRC website says I don't have to.

As I said, I'm not completely up to speed on RTI, but the fact that you don't have to register as an employer may not release you from the requirement to send in RTI information. I'd recommend speaking to the new employer's helpline, which I always found very helpful.

Plus what I said about your statutory responsibilities still applies. ACAS website is quite helpful. There is a lot more to employing someone than just paying them ...

cotswoldaccountant

Savvy_Sue wrote: »

Fair enough, but what will you do if / when their situation changes? eg they get another job which pays more than yours, they start drawing a pension etc.

At that point, you would need to register as an employer with HMRC.

Savvy_Sue wrote: »

As I said, I'm not completely up to speed on RTI, but the fact that you don't have to register as an employer may not release you from the requirement to send in RTI information. I'd recommend speaking to the new employer's helpline, which I always found very helpful.

RTI only applies to those employers who operate a PAYE scheme, i.e. are registered as an employer with HMRC. Employers who meet the conditions in my previous post do not need to set up a PAYE scheme and as such do not need to send RTI information to HMRC.

If an employer operates a PAYE scheme, then they will need to submit RTI information for all employees, including those who earn below the LEL.

Savvy_Sue

cotswoldaccountant wrote: »

At that point, you would need to register as an employer with HMRC.

So my point to the OP remains: he doesn't want to register, and apparently atm maybe he doesn't have to. But once he's got this employee, he may not have a choice.

TBH I don't really understand the reluctance: there's enough other 'stuff' you have to comply with when you take on staff, the HMRC side is really inconsequential in comparison, IMO.

cotswoldaccountant wrote: »

RTI only applies to those employers who operate a PAYE scheme, i.e. are registered as an employer with HMRC. Employers who meet the conditions in my previous post do not need to set up a PAYE scheme and as such do not need to send RTI information to HMRC.

If an employer operates a PAYE scheme, then they will need to submit RTI information for all employees, including those who earn below the LEL.

Ah, that enlightens me. However it seems to make a bit of a nonsense of the whole point of RTI: if a sole employee misleads their employer (either accidentally or 'accidentally on purpose') into believing the employer doesn't have to operate PAYE, it's going to take HMRC a while to catch up with them.

And let's face it, we see enough people on this and the employment board who have no idea that JSA is taxable, and no clue as to what else is or is not taxable income ...