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One for the payroll experts

I have a new client with a company that has one employee - they have been working for a few months but have never been on PAYE. the employee is now leaving and as you would expect wants a P45. Is there a quick way to get him a P45 without registering for PAYE with HMRC or is that wishful thinking?

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If you are an accountant

Do you know anything about the Money Laundering regs and/or the PCT?

Just asking.................

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Were they required to set up a PAYE scheme...
When you need to register

You don't necessarily need to register as an employer once you take someone on. Check first that at least one of the following conditions applies to you. If any apply, then you need to register:

the employee already has another jobthey are receiving a state or occupational pensionyou're paying them at or above the PAYE thresholdyou're paying them at or above the National Insurance Lower Earnings Limityou're providing them with employee benefits

If the above conditions apply, then your client could simply provide a letter stating when they started and left employment and how much they were paid. This will serve the same purpose as the P45 - I had this confirmed on a number of occasions by calling the HMRC employer helpline and a lot of my clients have done this and the letters have been accepted for benefits applications, etc.

If however, the client should have set up a PAYE scheme and hasn't then that is wrong and surely the client would have to contact HMRC and come clean and register and then once issued with the relevant reference numbers, issue a P45.

Surprisingly, I have submitted a number of PAYE scheme registrations both via telephone and online and the reference numbers have arrived within 10 days. Quite good for HMRC!!!!

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Thanks a_m

Cheers for that, just what I was looking for.

I basically wondered whether there was something similar to say, the informal procedures for IHT when dealing with PAYE on a small scale. As you mention above it looks like there may be so once I have the detail etc I'll go from there.

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No informal procedures for PAYE

Every employer must be aware of the PAYE conditions set out by a_m.  There are then just 2 possibilities:

Either, the employer is required to register for PAYE and must operate the formal PAYE procedure,Or, the employer is not required to register for PAYE, in which case he can issue a letter or do whatever else he likes, but this is not an informal PAYE procedure - it is simply that PAYE does not apply.

Thinking that there is a halfway house on PAYE is a recipe for disaster.

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Exactly

Euan MacLennan wrote:

Every employer must be aware of the PAYE conditions set out by a_m.  There are then just 2 possibilities:

Either, the employer is required to register for PAYE and must operate the formal PAYE procedure,Or, the employer is not required to register for PAYE, in which case he can issue a letter or do whatever else he likes, but this is not an informal PAYE procedure - it is simply that PAYE does not apply.

Thinking that there is a halfway house on PAYE is a recipe for disaster.

Because if he was required to register for PAYE and didn't, then the OP should be asking himself: why not? That is why I mentioned the MLRs.

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Has there been an actual employment?

Worth asking this question as you never know unless you ask and it may not be clear cut at all.

Don't forget that this person may have acquired some rights as an employee or worker, and so the NMW will have applied and likewise he will also have statuory entitlement to holiday and redundancy.

Virtual Tax Support for accountants and their clients: www.rossmartin.co.uk

 

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Thanks for the responses

I met the client in my 'out of hours office' last night and have the detail, and a slight headache. PAYE registration here we come!

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