We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Lower earning limit

Options
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?

Comments

  • Pennywise
    Pennywise Posts: 13,468 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    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.
  • Snowbird
    Snowbird Posts: 123 Forumite
    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?
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    1,000 Posts Combo Breaker
    Snowbird wrote: »
    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?
    no you would not do a "nil" return

    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)
  • uknick
    uknick Posts: 1,767 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    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.
  • Snowbird
    Snowbird Posts: 123 Forumite
    Are there any additional requirements if the employee is the sole director and the salary is allocated to the DLA?
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.9K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.9K Work, Benefits & Business
  • 598.7K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.