PAYE Scheme for 2 separate Ltd Companies

PAYE Scheme for 2 separate Ltd Companies

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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?

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By johngroganjga
17th Aug 2015 10:11

It depends whether both companies are employing staff and paying salaries, or only one of them.

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paddle steamer
By DJKL
17th Aug 2015 10:21

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...

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By sue114gold
17th Aug 2015 10:28

Both will be paying staff, my first thought was that as they are separate entities then they should have separate PAYE schemes from the start of the new company (neither will  be VAT registered) and both are community trusts

 

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By petersaxton
17th Aug 2015 10:33

If they are two companies paying staff

why wouldn't they have two payroll schemes? They are two employers.

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By sue114gold
17th Aug 2015 10:37

It was just the way they wanted to set it up as the first company are closely involved with the management of the second and the directors of the second company are two of the employees from the first trust, my initial instinct was no they should have two schemes but I just wanted to gather a second opinion

 

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Replying to jonny2001:
RLI
By lionofludesch
17th Aug 2015 14:21

Alternative

DJKL wrote:

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.

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