Can you back date a new payroll?

New client with no payroll in place, despite having an employee.

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Hi all,

I must admit payroll is not my strongest point, so sorry if this is a dumb question.

Can I register a client for payroll with a start date of June 2018, and simply complete and file the RTI's for the period June to December 2018, to bring everything up to date? If so are there likely to be any penalities etc.?

The reason I ask is that a new client has come over with no payroll in place, and although not the end of the world, as I could do an annual payroll for director, he has an employee (allbeit his wife) who he pays £116 a week too. He started these payments in June based on the advice of previous accountant but never set up a payroll. His wife is not a director or share holder, and there is no intention to make her one either. Therefore these payments should be going through payroll and subject to PAYE especially as she also has another job.

Replies (9)

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RLI
By lionofludesch
14th Dec 2018 14:28

If he's paid the wages, it sounds like it's genuinely wages so I'd be comfortable with reporting these to HMRC on the RTI system.

I'd be going for a monthly salary, though. Cuts down on work and fees.

I wouldn't expect there to be any penalties.

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By SteveHa
14th Dec 2018 14:52

How much has he paid himself? If £116pw or less, then there is no reporting requirement (both at or below the LEL).

Of course, it's not an optimum salary, and they should each look at a small increase to secure NI credits going forward.

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Replying to SteveHa:
RLI
By lionofludesch
14th Dec 2018 15:03

OP says £116 a week to his wife - which is enough in itself to trigger a PAYE scheme.

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Replying to lionofludesch:
By SteveHa
14th Dec 2018 15:04

Damn - I was looking at this year's LEL. I forgot about last year :)

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By mumpin
14th Dec 2018 14:56

Watch out for the Pension Regulator declaration!

You will be out of time with a June start.

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By andy.partridge
14th Dec 2018 15:38

She already has another job, your client should (probably) have been making a tax deduction every pay period since June.
Not good. Not good at all.

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By Manchester_man
15th Dec 2018 10:07

Indeed, the post mentioned that the wife had another job.
So you're going to have to treat the payments made as 'net' and gross up from there.

Also, the pensions issue is a valid point. Although this worker is earning below 10k, the deadline for the declaration of compliance with a June start will be 31st Oct.

Not sure how the pensions regulator treats late registrations in terms of penalties, but my guess is that they would charge a penalty (I'm not sure though). I've seen the penalties for late DOCs as they whacked a client for £400 for ignoring his duties.

I've been asked to appeal it, but struggling to see any grounds.

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Replying to Manchester_man:
By SteveHa
15th Dec 2018 17:48

The grounds are that the employer had no AE duties. You can't penalise someone for not doing what they didn't have to do.

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Replying to SteveHa:
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By Manchester_man
16th Dec 2018 18:53

Ste, sorry, I've just re-read my response and I realise, what I wanted to say came out all wrong!

The client of mine for whom I'm struggling to find any grounds for appealing the pensions regulator penalty, ignored his duties 'since' setting up a paye scheme and paying a staff member 1500 per month. He's screwed himself.

I've just never witnessed a pension regulator penalty before, thankfully, so I meant to say that they will issue heavy penalties for breaches of duties.

Cheers

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