Some employees have been offered a previous Director's shares but the fair market value is higher than the price they have paid.
The solicitors have asked the employees to send payment for the shares plus the PAYE, NI and stamp duty to the company so the company can pay the tax liabilities to HMRC on their behalf.
How can we transfer this amount to HMRC? Should it somehow go through payroll or would it be a seperate payment to HMRC?
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...so the company can pay the tax liabilities to HMRC on their behalf.
I'd hazard a guess that you've misunderstood something there. The employees are likely reimbursing the company for its costs.
This is being done to prevent a s222 ITEPA 2003 gross up charge presumably. Just Google that.
Yes, that assumes these are RCAs. See: https://www.taxinsider.co.uk/991-Awarding_Shares_to_Employees_Some_Pract...
My point exactly - I have seen too many advisers, both accountants and lawyers, that think that PAYE/NI must apply automatically.
I'm in the rare position of agreeing with everything that everyone has said.
Oh Happy Day.
We appear to have one shareholder selling shares to others, with the Company facilitating the transaction.
I'm not expert in this area but it's not obvious to me why such a transfer of shares creates a payroll tax liability - even if the vendor is selling at undervalue.
Absent more information, I'd also question the basis of the market valuation. Minority holdings in unquoted companies (if that is the case here) are difficult to value definitively.
It's because the employees' opportunity to acquire the shares has arisen by reason of their employment. Absent the family and personal exception, the law deems the transfer to be by reason of their employment even if, as a matter of fact, it hadn't been.
I agree with the others that it seems unlikely that the shares are RCAs and therefore PAYE/NIC doesn't need to be accounted for. This is a timing difference for IT but an actual saving re the NIC.