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Lower earning limit
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Snowbird
Posts: 123 Forumite
in Cutting tax
If a company or other employer pays an employee the lower earnings limit in order to protect entitlement to state benefits, how do they or the employee register that entitlement with HMRC or DWP?
Do they simply inform DWP once that they are paying the employee this amount or does the payment have to be registered more frequently?
Do they simply inform DWP once that they are paying the employee this amount or does the payment have to be registered more frequently?
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Comments
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You report each payroll amount/date to HMRC via their "RTI" system via payroll software. To do so, you need to register as an employer and get an employers' PAYE scheme set up.0
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Many thanks for the speedy reply.
So you need to set up as an employer even if this person is the only one on the payroll?
So effectively you would do a nil return every month?0 -
Many thanks for the speedy reply.
So you need to set up as an employer even if this person is the only one on the payroll?
So effectively you would do a nil return every month?
if your employee is the only person being paid AND that they are paid not 1 penny more than £118 per week then you do not need to register for PAYE, but you are nonetheless REQUIRED to keep and submit payroll records
https://www.gov.uk/paye-for-employers
those would report to HMRC that the person earned £118 and paid £0 tax and NI
https://www.gov.uk/running-payroll/reporting-to-hmrc
so much simpler just to use payroll software and let the system take the strain: the payroll software will calculate that tax and NI is zero and report that each week/month (depending on how often the employee is paid) to HMRC as part of the RTI process
(assuming of course the employee has a "full" tax code - otherwise HMRC will write to the employer and notify the employer of a different tax code to be used. Sorting out a tax code in that latter case is the employee's personal responsibility)0 -
Following on from 00ec25's post you could use this free payroll software;
https://www.gov.uk/basic-paye-tools
It's pretty simple to use and does the job of informing HMRC of the numbers, once you've set up the relevant accounts with HMRC.0 -
Are there any additional requirements if the employee is the sole director and the salary is allocated to the DLA?0
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