Process payroll without PAYE scheme

Process payroll without PAYE scheme

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Im sure we've all had it where a client comes to you and says that they are planning on starting up in business tomorrow (or worse still have already started trading) and want to pay their staff before the PAYE scheme is set up.  With the penalties for RTI looming I was wondering what the best way to tackle this is?  Is it a case of telling the client they cant pay their staff until the PAYE reference is received? Or because its technically the clients fault for not coming to me sooner will they just have to pay the fine?

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By King_Maker
05th Sep 2014 11:05

I had this problem a few weeks ago.

HMRC were very helpful and set up a PAYE Scheme over the 'phone.

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Euan's picture
By Euan MacLennan
05th Sep 2014 11:10

Run the payroll

Of course, you should run the payroll to pay the staff when due.  You don't need a PAYE reference to calculate PAYE correctly.

Apply immediately for a PAYE scheme by using the appropriate e-mail.  You should get the PAYE references within a couple of weeks.

You will not be charged a penalty provided the FPS is filed within 30 days of the payment to the employees.  In fact, as it would be the first late FPS of the tax year, you would not be charged a penalty anyhow.

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By MissAccounting
05th Sep 2014 11:17

Thanks for the replies.  Euan

Thanks for the replies.  Euan, what would happen if it was a weekly payroll and took 2 or 3 weeks to recevie the PAYE ref through the post?  There would be at least 2 late FPS returns by that point.

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Euan's picture
By Euan MacLennan
05th Sep 2014 11:36

Appeal

Although it does say that a penalty would not be charged for the first late FPS if filed within 30 days, I suspect that it would apply to more than one FPS filed within 30 days of the first payment to employees.

If not, you only get one penalty a month if all your weekly FPSs in the month are late and to quote the HMRC guidance - "However, no penalty will arise for the first month in each tax year where there is a filing default."  So, there would still be no penalty.

As you appear to have taken on a weekly payroll (foolishly in my opinion), try the King Maker's suggestion of calling the Employer Helpline.  However, judging by other recent threads, an e-mail might be quicker!

If you still end up with a penalty, appeal.  You could not have better grounds than HMRC's delay in setting up a PAYE scheme which you have requested.

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By Howard Marks
05th Sep 2014 11:47

Micro's, weekly and 2016
HMRC recently extended the micro employers filing exemption until 2016. It extends the previous temp relaxation of reporting arrangements under RTI and is for employers with nine or fewer staff only.  They can report PAYE information on or before the last payday in the month until April 2016 (submit using excuse E).  

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By MissAccounting
05th Sep 2014 12:02

Thanks again Euan, I already have a few weekly payrolls to do but I ensure they pay well for all the hassle!

 

Howards Marks - can you provide a link to the 2016 extension?

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By jonsa
10th Sep 2014 14:49

Weekly and 2016

But I note there is more in the 8th paragraph, which states that if you already report for RTI properly, then you must continue to do so <cannot seem to paste it in>.

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Stepurhan
By stepurhan
10th Sep 2014 14:53

Referred paragraph

This is the text of the paragraph jonsa is referring to.

Linked HMRC news wrote:
All employers, regardless of size, who are already using payroll software products or HMRC's Basic PAYE Tools to report PAYE on or before the date they pay their employees should continue to do so.
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By stevet
10th Sep 2014 14:56

PAYE references coming through super quick

Recently applied online 3rd Sept PM, Received ref  6th Sept in post.

Not the first time they have been quick either!

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