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14-15 PAYE Schemes

14-15 PAYE Schemes

I have quite a lot of new PAYE schemes to setup for the new tax year 14-15

Would I be wise to not apply for these until 6th April or should it not cause any issues applying during March if I say that the first pay date is April?

I am away for a few weeks in April so the more work I can do ahead of then the better...

thanks

RM

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By Maslins
17th Feb 2014 09:48

Afraid I can't directly answer your Q, but I do recall having the same dilemma last year.  I seem to recall being pretty unimpressed that when I asked on the phone line there was no way to do it in advance, it had to be left until 6 April.

Given RTI coming in, I thought this sounded like a bad idea, as you typically wait a few weeks for your references to come through.

I may have had a numpty on the phone, and/or things may have changed, so happy to be overruled by others who may know better.

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By Kazmc
17th Feb 2014 10:28

Online

When you apply online one of the questions is 'when will the first payments be?' so we have been applying now with a payment commence date of 06/04/14.

Hoping now that this works and we do not have an influx of 'chasing' letters for 13/14....

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By Maslins
17th Feb 2014 10:35

@Kazmc I have no proof I'm right on this, but what you're suggesting is basically what I wanted to do this time last year.  I was told it wouldn't work and I had to wait until post 6 April to do it.  Would love confirmation that it does work, as I'd far rather be nicely prepared in advance!

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26th Feb 2014 11:55

New Payrolls

Kazmc wrote:

When you apply online one of the questions is 'when will the first payments be?' so we have been applying now with a payment commence date of 06/04/14.

Hoping now that this works and we do not have an influx of 'chasing' letters for 13/14....


Providing you do not apply more than 4 weeks in advance the above process should work. Where I have applied to start the payroll further ahead its gets rejected and you are told to re-apply nearer the payment date.
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By Maslins
27th Feb 2014 11:29

Cheers

Thornbury wrote:

Providing you do not apply more than 4 weeks in advance the above process should work. Where I have applied to start the payroll further ahead its gets rejected and you are told to re-apply nearer the payment date.

Interesting.  If that's correct, then that's fine.  4 weeks is plenty.  Guess we'll start on those in a fortnight :)

@Euan we never bother with the P50 side of things (hadn't heard of it until now!), just wait until self assessment.  Yes, clients typically just take dividends for first few months, rather than trivial salary + dividends.

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By Kazmc
17th Feb 2014 11:45

@Maslina

Thanks Maslina

Be interested to know if anyone else has clarification...

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By redman7
24th Feb 2014 13:31

any more for any more?

Thanks for the input 

Anyone else with any thoughts or experience on this?

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24th Feb 2014 14:26

I am slightly puzzled

"I have quite a lot of new PAYE schemes to setup for the new tax year 14-15"

Do you usually have quite a lot of PAYE schemes to set up each month or is there some reason why you are saving them up for 2014/15?

I agree with Kazmc.  If you have been allowed by the online system to apply for new PAYE schemes more than a month ahead of the first payday, I see no reason why they should not be processed in due course.

"I am away for a few weeks in April so the more work I can do ahead of then the better..."

The bulk of the work is in setting up the payrolls - employer and employee details, etc.  The PAYE scheme and AO references are just entries in two boxes.

 

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By Maslins
26th Feb 2014 11:30

How do you deal with this?

Euan MacLennan wrote:

"I have quite a lot of new PAYE schemes to setup for the new tax year 14-15"

Do you usually have quite a lot of PAYE schemes to set up each month or is there some reason why you are saving them up for 2014/15?

There's probably multiple ways to skin a cat...but common situations for us is client starts a Ltd Co mid way through tax year, but perhaps they'd earned £20k on a P45 from the first part of the tax year.  We therefore decide to not pay them any salaries until the next tax year.

I guess we could register the company as an employer at the time and do £nil RTI returns, but firstly that's a bit of additional work, and secondly, then presumably any PAYE refund would need to be refunded by the payroll dept to the company then onto the employee.  My experience is getting these kinds of refunds is an absolute nightmare, therefore easier to just leave it until self assessment time where any overpaid PAYE goes straight back to the individual fairly quickly.

Sure we're not the only firm who has the above kind of scenario, I'm interested how others deal with it.

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By redman7
26th Feb 2014 11:37

@maslins

Agreed - I think we deal with similar clients as I have quite a lot of clients who where employed then move to contracting and have used up their tax free allowance already so although they're missing out on a CT deduction they'd be taxed at source, so it's simpler to just take dividends for the balance of the year.

I do process P50's for them as there is usually tax overpaid

Maybe there's a better way?!

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26th Feb 2014 11:52

Fair enough

That's a reasonable explanation for starting PAYE schemes in April.

But what do you do about getting the PAYE tax refunded?  Form P50 says:

Use this form to claim tax back if:
• you have been unemployed for four weeks or more, or
• you are not claiming one of the taxable benefits listed below, or
• you do not expect to go back to work, or
• you have retired permanently and are not receiving a pension from your old employer, or
• you have returned to fulltime study.

Only send this form after your fourth week of unemployment.

So you would be lying if you used it for your example of employees moving to work for their own PSC.

And if the client lives on dividends for the first few months of his new company, do you do it properly with management accounts and dividend paperwork?

Maybe, setting up a PAYE scheme at the outset would involve less work?

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By redman7
26th Feb 2014 12:13

@Euan

re the P50 my assumption (which is probably wrong!) was that because they are an officer not an employee they could get their refund? If this is wrong I'll just do it through self-assessment going forwards as it's less work for me!

EDIT: And because they aren't going to be paid any salary until the next tax year for the reasons discussed above

re dividendsvirtually all my Limited clients use FreeAgent so are all on top of their accounts including corporation tax provisions so no issue there and yes paperwork all done 

 

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By Kazmc
27th Feb 2014 15:29

We have just received.....

We have just received an email as follows in response to trying to apply for new PAYE ref (before we were aware of the 4 week rule!)

 

Thankyou for your email

Before proceeding we require clarification of one point;

You have entered a 1st pay date of 06/04/14

Please confirm if this is the correct date (as there will be end of year paperwork since we can only set scheme up showing todays date and not a future date)

We will proceed once this has been clarified.

 

So can they or can't they?

and can we set any up 4 weeks in advance?

As usual clear as mud!

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By Maslins
27th Feb 2014 15:46

Sounds familiar

Kazmc wrote:

Please confirm if this is the correct date (as there will be end of year paperwork since we can only set scheme up showing todays date and not a future date)

Yup, bold bit sounds v familiar from last year...but from other posts above I'd hoped this was wrong!

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27th Feb 2014 16:16

Don't be surprised if...

When you wait until after 6 April to set up the new PAYE scheme you get the same old queries about where's the PAYE for the previous year etc etc.

We are dealing with morons here as usual.

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