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Declaring very low earnings

Is it necessary to declare earnings of under £3000 pa to HMRC if that's the only source of income?

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I employ someone who has mental health problems and is unable to find other employment.  They also do not claim benefits of any kind and live at home with parent (another topic entirely).  What is the situation regarding reporting earnings and/or paying NI contributions for him and me as his employer?

Any advice gratefully received.


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22nd Oct 2018 12:02

If you have other employees, just stick his pay onto your RTI return.

If not and he ticks the box to say he has no other income, there's no obligation to report at this level of earnings.

But he won't get any NI credit. He'll need to pay Class 3 contributions at £700+ a year. Which is a big slice of his pay. And there's the big flaw in the social welfare of the mental health sufferer. Not that that's your problem.

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22nd Oct 2018 12:50

If the £3,000 is spread out evenly throughout the year, then lion is correct. However, if it's seasonal and pay in any period is more than £116 per week or £503 per month then there will be both employee and employer NI to pay and you will need to register for PAYE and make appropriate RTI submissions to HMRC.

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to SteLacca
22nd Oct 2018 13:02

True - I had made that assumption.

The employee still wouldn't get a full year's NI credit, though.

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to lionofludesch
22nd Oct 2018 13:22

Agreed. I was addressing the reporting and PAYE obligations specifically.

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