Setting up a PAYE scheme in advance - "not allowed" say HMRC | AccountingWEB

Setting up a PAYE scheme in advance - "not allowed" say HMRC

In a spare moment today, I decided to set up PAYE schemes for 4 new companies (just one director per company and each will be paid one salary for the year on 05/04/12) so that a) I would not forget in future, b) to save me having to rush to do it in April 2012 before the filing deadline, and c) so that HMRC could take their time to set up the scheme (and everyone would be happy!)

I have received emails back from HMRC saying that they cannot set up the scheme because I had indicated that the first pay day would not be within the next 4 weeks. I phoned the PAYE Helpline but received no assistance. They even suggested I set up the scheme in the early months of 2012 (no way! I will be too busy in January, on holiday in February (well deserved!!), and busy catching up with other matters in March).

HOW STUPID IS THIS? (Yes, I am shouting!)

I asked the Helpline why they could not set up the schemes and mark then as "Annual Schemes". They told me that this was not possible. When I pointed out that quite a number of my clients were set up this way (so as to avoid silly reminders from HMRC being sent out for payments not being due, and me having to send in nil payslips - a very sensible and economic arrangement), they said that they no longer set up annual schemes. Since when? Did they ever tell us?

All I am trying to do is register my clients for PAYE (well in advance of deadlines) and set them up as annual schemes. This will save both HMRC and me time. Instead, HMRC are suggesting that I register in March/April 2012. This carries the risk that I will not get the scheme reference numbers in time, won't be able to file the P35s, will receive penalty notices for late filing, have to appeal against those penalties, HMRC will forgive the penalties, and so on - all very time consuming and a waste of money.

Why can't HMRC register a PAYE scheme well in advance of the first pay date? I cannot see any reason why they can't (unless their software won't allow it - in which case it won't be rocket science to change the software to allow it)

Old Greying Accountant's picture

What I would do ...

Old Greying Acc... | | Permalink

... is tell them the pay day is within four weeks and get the scheme set up.

There is nothing to stop the directors changing their mind and deciding not to pay themselves.

Once you have the scheme telephone HMRC and say there has been a change of plan and that there are not likely to be any payments until March!


ShirleyM's picture

That is sneaky OGA ...

ShirleyM | | Permalink

... but I like it. I will use that idea myself :)

mr. mischief's picture

day job stuff!

mr. mischief | | Permalink

This is the sort of thing I do all the time to get round their stupid jobsworthy drivel!

I do the same

Flash Gordon | | Permalink

It's so frustrating when you're doing the whole company set up so I just lie & say they'll be paid at the next month end & hey diddly presto one paye scheme. They've just not grasped the idea that some of us like to be organised.....

petersaxton's picture

HMRC have a different attitude

petersaxton | | Permalink

They don't have deadlines. Nothing happens to them if work takes longer than it should. They just don't understand the concept of doing things quickly and properly.

Another source of penalties??

Yonder Dave | | Permalink

Once a PAYE scheme is set up HMRC require a monthly (or quarterly) payment or notification of No Monthly Payment Due. For our director only companies we dutifully submit online No Monthly Payment Due returns for each and have not heard back on any.

I suspect this is all part of the new Penalty culture at HMRC.

We got caught out last year by not reporting No Employer Annual Return to make. Having always worked on the basis no P11s no P35 it was a surprise when the penalties for £400 started arriving in July (all cancelled after a written request) and I noticed a sentence had been included in the website guidance about letting HMRC know that no return is due to avoid “unnecessary reminders and penalties”.

I notice that in the past couple of months they have added an online form for Employers to notify no return to make and, unusually helpful for HMRC, there is an Agents form so we can report no returns due from multiple clients.

This declaration also includes confirmation that P11D(b) due/not due and I suspect that penalties will not be so readily cancelled in the future.

I can understand this because we have taken on many payrolls over the years where no P35 had been submitted and no P11D(b)s, even though there were expenses that should have been reported. In the old days if there was no loss of revenue for HMRC there was no revenue.

As mr.mischief says we have to play their game and with payroll this now means ensuring a dispensation is in place for all expenses (but here again MNRC will not allow a dispensation on anticipated expenses) and for every return that nil/no return due is reported.

petersaxton's picture

Only specific expenses

petersaxton | | Permalink

You can't a dispensation in place for all expenses.


Yonder Dave | | Permalink

Sorry Peter, I meant a dispensation for the expenses that can be included which otherwise would have to be claimed back through s336 claims, which just seem to sit in a pile somewhere.

The point I was trying to make is that in 99 out of 100 cases a dispensation can be allowed for travel, subsist, ent, etc. and hence no P11D(b) due, and it is better to do this than not submit a P11D(b) just because in theory there would be no loss of revenue to HMRC.

johnjenkins's picture


johnjenkins | | Permalink

this is where self-serve will come into its own. Being allowed to set up PAYE schemes etc. will not only free up HMRC staff we can do it when we want to and not be dictated by rules governed by penalties.

rockallj's picture

Being able to get old defunct PAYE schemes

rockallj | | Permalink

Being able to get old defunct PAYE schemes closed down by HMRC would be nice.

I am fed up with appealling against penalties for non submission of PAYE schemes which I requested 4 years ago, or more, be closed down.


pauljohnston | | Permalink

If it is a Ltd company you need not appeal.  Just send back the demand with a note " This company was struck off on ....  This means that there are no officers of the company and it has no funds.  We recommend you cancel this notice.

Dont foget your authority to act for the Company ceased when it was struck off.

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