Avoiding need to register for PAYE as an employer

chrismac1

In principle RTI is a good idea. In practice in my view by June 2013 we'll be in the middle of the biggest UK tax shambles yet, which is quite saying something. Only a fool would volunteer to join this party, and some of my clients who do not need to be part of it have opted out.

Fair enough there is a one year time freeze on penalties - which is only brought in with HMRC wailing and gnashing teeth - but after that the gloves are off and we can expect the sort of massive fines seen in the CIS scheme. Under RTI large fines can be built up quite quickly if you are not careful.

So the OP in my view should get the P46 signed, file it and forget all about this RTI drivel.

System

There is also the more fundamental question of what is an employee, as opposed to a casual worker. This probably isn't relevant in the questioner's case, but is very relevant to the RTI changes.

For some years we had a cleaner come in 2 hours a week. We have always been quite clear that she was a casual worker, and obviously paid well below the thresholds.
The main criterion apparently is whether the worker enjoys any employment benefits - sick pay, annual leave, annual bonus, other company perks.
Obviously not, we thought. But there is a ruling that makes an office cleaner different from any other sort of cleaner - home, shop, factory, etc.
So from 6 April she will become an employee, and we shall have to log on Real Time each time she collects her £12.38.

But a window cleaner, student who helps out for 2 hours on Saturday, man who sweeps the boiler chimney would not be an employee, only a casual worker.

chrismac1

These are the sorts of problems which are going to overload the database and lead to meltdown. There are several thousand employees nationally, for example, with the surname "Cleaner" and initial "A". Likewise there are any number of employees with made up NI numbers and dates of birth.

Any sensbile Work and Pensions Secretary would have asked for monthly submissions from each employer. Instead, consider a amnaufacturer with monthly staff and three separate payrolls for weekly paid staff on rotating 8 hour shifts.

That is a minimum of three submissions every week, and one per month, for just one company. Likewise up and down the country businesses who are not "box standard" in their current payroll and shift arrangements are having to come up with workarounds and fudges.

When self-assessment came in HMRC claimed it would not lead to extra cost for taxpayers. Just look at the sheer numbers of posts on this site alone from hapless victims of the SA system. HMRC are about to implement the same failed process in PAYE, only with less resources - staff who have their minds more on the next strike day than serving the public - and less awareness within affected businesses of just what is about to hit them.