Hi I have an organisation (Ltd Co) who have set up a separate Limited Company who will be closely entwined with, and the first company will be effectively controlling the new second company, do they need to set up a separate payroll scheme or can they run under contract to the original scheme of the first company?
Replies (8)
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It depends whether both companies are employing staff and paying salaries, or only one of them.
Vat tends to be the issue but have a look at vat notice 700/34 re staff (below) which may assist.
I suspect you need to look carefully at the particular circumstances of the arrangement as to the correct treatment in the particular circumstance you envisage.
https://www.gov.uk/government/publications/vat-notice-70034-staff/vat-no...
If they are two companies paying staff
why wouldn't they have two payroll schemes? They are two employers.
Alternative
Not if they are inter billing or more especially in a group situation. It is not that uncommon,I have done it within "Group" myself. Hence the vat notice I linked. I am currently in process of smoothing our "group" payrolls into one , one of the reasons is I do not want to have to run more than one AE scheme. Providing the employee contracts are dealt with correctly and TUPE is observed there are times where it may be sensible.
It's not the scenario first mooted.
Yours is an alternative solution but not the scenario I commented upon.