whether to register for RTI

whether to register for RTI

Didn't find your answer?

New client trading company.

Formed Feb. 2012 but never paid any money under PAYE to anyone and never intends to. This company will only ever pay dividends to its one shareholder.

The company did originally register for PAYE, so has the requisite reference numbers, but it has never filed any such returns.

Following the advent of RTI online submissions have been attempted but have been met with onscreen messages from HMRC such as “error number = 7802. You have not been invited to submit this submission type”.

Should the company contact HMRC now to make sure it can file under RTI even though it's a waste of time continually filing nil monthly returns to ensure it avoids any future fines under the new automatic penalty regime?

Any other thoughts or suggestions?

Many thanks.

Replies (5)

Please login or register to join the discussion.

Stepurhan
By stepurhan
09th Apr 2015 08:28

PAYE Scheme defunct?

It sounds like the PAYE scheme has been closed down. No PAYE scheme and no employees paid under PAYE. No problem.

However, if they have never filed anything, I would expect there to be late filing penalties instead. For the P35s pre-RTI if nothing else. It would be unusual for HMRC to just close a scheme down without trying to collect these. That could be a nasty surprise waiting to be sprung at any moment.

I presume there is a good reason for not wanting to pay a salary to the sole shareholder/director.

Thanks (1)
avatar
By taxinfo
09th Apr 2015 09:03

Thanks stephurhan.

You say "no employees paid under PAYE. No problem." but there is, of course, one 'default' employee - the director. That's my concern.

The director has substantial income from other sources and his plan is only to take dividends from this particular company, Never anything under the remit of PAYE regulations.

As we've not met this kind of situation before can I ask for your further thoughts?

Re. that "nasty surprise" you refer to - what action would you recommend our client take?

Keep his head down, do nothing until/unless anyone is 'paid' then register for RTI at that time?

Trust to hope nothing happens from the past?

Register for RTI now on and file NIL returns from now on to ensure those new automatic fines are avoided?

Something else?

 

Thanks (0)
Replying to johnjenkins:
Stepurhan
By stepurhan
09th Apr 2015 09:30

Ask HMRC, possibly

taxinfo wrote:
You say "no employees paid under PAYE. No problem." but there is, of course, one 'default' employee - the director. That's my concern.
Technically the director is an officer, not an employee. He only becomes an employee if he has a contract of employment as well.

But the key thing is that he is not being paid anything under PAYE. You could have 1,000s of employees all being paid under the LEL but, provided none of them had other jobs, you wouldn't need a PAYE scheme for them either.

Quote:
Re. that "nasty surprise" you refer to - what action would you recommend our client take?
Therein lies the dilemma.

Presumably the client has not received any notices of penalties for late filing. This is, in itself, surprising. HMRC may have closed down the scheme without pursuing penalties. The only way to find out for sure would be to ask them if the scheme has been closed. The risk of doing so is that the scheme is actually sitting there with the penalties attached and contact will alert HMRC to the fact they haven't done anything about them. A new client is unlikely to welcome that. I'd say you'd have a good argument for getting any penalties overturned on the grounds the scheme was not required and HMRC have not sent out letters, but it could be a lot of hassle.

That is the only way of achieving certainty in the matter though.

Thanks (0)
avatar
By taxinfo
09th Apr 2015 13:40

OK. Thanks.

I'll mull it over with the client.

Thanks (0)
avatar
By onicholson
09th Apr 2015 10:48

Closed scheme

The message indicates the scheme has been closed in a pre-RTI year, which means it was never enabled for RTI. HMRC don't typically leave schemes that have never done anything open and will close them.

If you need the scheme open, contact HMRC and get it opened again.

Thanks (1)