We've just met with a new client. He runs a small business self-employed and has an apprentice. We asked if he'd like us to take care of his payroll for him and he said he doesn't run a payroll scheme as he contacted HMRC and was told by them that he isn't required to have a PAYE scheme set up or submit payroll because his apprentice is on a low wage.
He says that without a doubt, this is what HMRC told him and therefore he's sticking to it.
Before we discuss it further with him, I'd like to know if anyone else has heard of this situation arising before? As far as we are aware, this could cause issues if the apprentice has other income, and due to HMRC not knowing about this job, he's being taxed incorrectly. It could also affect things like Universal Credit.