PAYE
As an employer, it is your responsibility to correctly determine the employment status of your workers — whether they are employed by you or self-employed. This depends on the terms and conditions of your working relationship with each worker.
Understanding PAYE responsibilities
Establishing the correct employment status is important because it affects how tax and National Insurance contributions (NICs) are calculated for each worker. It also determines whether you need to operate a PAYE scheme on their earnings.
PAYE (Pay As You Earn) is the system employers use to deduct income tax and, where applicable, National Insurance contributions from employees’ pay and account for these amounts to HMRC. The correct deductions and reporting must be made in line with the relevant rules.
What employers need to manage
Employment status
Understand whether workers should be treated as employees or self-employed, based on the circumstances of each working relationship.
Tax and National Insurance
Apply the appropriate deductions and ensure payroll calculations reflect the relevant employment and tax rules.
Real Time Information (RTI)
Submit the required payroll information to HMRC on or before each payday, in accordance with reporting requirements.
Payments to HMRC
Keep track of amounts deducted from employees’ pay and ensure the associated payments and reporting are handled on time.
Keeping your payroll compliant
Under HMRC’s Real Time Information (RTI) system, employers generally need to report details of employees’ pay and deductions each time they pay their employees, rather than relying on a single annual payroll return.
Managing these obligations accurately and on time can take considerable effort. Getting the process right helps you maintain payroll records, meet reporting requirements and reduce the risk of avoidable errors.
Looking to outsource your payroll?
Evans Entwistle can assist with PAYE matters and payroll administration, helping you manage your responsibilities while freeing up time to focus on running your business.
Need help with PAYE?
If you need assistance with PAYE matters or wish to outsource your payroll services to Evans Entwistle, please contact us.