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Late PAYE registration and RTI

Client is registering late as an employer. Can RTI submissions be made?

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I am just taking on a new Ltd company client.

There is one director and shareholder. Her husband was an "employee" from September to Decemeber with wages paid. However, there was no PAYE scheme set up and no RTI submissions have therefore been made.

My first thought was that it's too late and that the salary paid to the husband should be shown as dividends instead for the wife.

However, can I go back and submit the Septemeber to December payroll once the PAYE scheme is set up this month? I know there may be 4 months of £100 penalties but this may actually be favourable for the corporation tax saving and the employee having earnings.

Is it possible to go back and file RTI submissions late for a period where no PAYE scheme existed?

Replies (13)

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By Wanderer
20th Jan 2022 11:37

Nicky Richards wrote:

My first thought was that it's too late and that the salary paid to the husband should be shown as dividends instead for the wife.

My first thought is you are just MSU (Making Stuff Up).
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Replying to Wanderer:
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By Hugo Fair
20th Jan 2022 19:22

Indeed. What actually happened when OP says:
"Her husband was an "employee" from September to December with wages paid"?

Why is the word employee in inverted commas (was he or was he not an employee)?
When wages were paid, were tax/nics calculated & deducted (and paid to HMRC)?
Was employee given payslips ... if not, what leads OP to think there were any wages?

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By SkyBlue22
20th Jan 2022 13:35

No, submissions have to be made on or before the day of payment.

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By Catherine Newman
20th Jan 2022 14:18

Hi Nicky

There have already been two if not three similar threads since Christmas and we are all divided. Just file 4 RTI returns when you get the scheme and when it asks the reasons for the late filing hit "Reasonable Excuse". I have never seen it challenged.

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Replying to Catherine Newman:
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By Nicky Richards
20th Jan 2022 14:27

Thank you. That's what I'll do. I've never submitted late and certainly for a period before a scheme was registered so I was unsure of what was possible.
The clients are South African and moved here and immediately started trading and they didn't get issued with NI numbers for two months after salaries started so hopefully that's a reasonable excuse.

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Replying to Nicky Richards:
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By Catherine Newman
20th Jan 2022 14:39

I have registered several schemes for people who"didn't know about PAYE". PAYE can't be operated without an NI number so you have a reasonable excuse.

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Replying to Catherine Newman:
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By Nicky Richards
20th Jan 2022 14:42

Thank you very much.

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Replying to Catherine Newman:
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By Hugo Fair
20th Jan 2022 19:11

Not sure what you mean by "PAYE can't be operated without an NI number".
Are you referring to the set-up of a PAYE Scheme?
Because you can definitely process an employee without a NINO (both in legal terms and in terms of acceptability by RTI).

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Replying to Hugo Fair:
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By Catherine Newman
21st Jan 2022 18:41

No. You can't set up records for employees without an NI number. Where would the NI be credited?

Reasonable excuse has never been followed up.

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Replying to Catherine Newman:
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By Hugo Fair
21st Jan 2022 20:50

I'm sorry, but you are plain wrong!

There's no room for 'maybes' or 'it depends' on this point. You CAN (and indeed MUST) report an employee's earnings on/before payment EVEN IF that employee either has no NINO or does have one but doesn't provide you with it in time. No ifs, buts or any doubt whatsoever!

It is HMRC's responsibility to sort out the NI credit - or to be absolutely precise, it's their responsibility to either locate the missing NINO and advise the Employer of this via an NVR (for future FPSs) - and then, having held the funds in suspense at their end, pass them over to DWP once the NINO is found/issued - or, if no NINO exists, to advise Employee of the need to complete the application process.

Not having (or being able to find) a NINO is NOT a valid reasonable excuse for non or late filing ... so if you're saying you've got away with it then you (or your client) should count yourself very lucky. Maybe worth trying the lottery if you're on a winning streak!

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Replying to Catherine Newman:
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By Hugo Fair
20th Jan 2022 19:17

If the question related to an existing PAYE Scheme for which these FPSs had not yet been submitted, then you can indeed submit them late (and use a 'Reasonable excuse' code in the hope of avoiding the late filing penalties).

But the question here relates to submitting an FPS (late or otherwise) for a period *prior* to the creation of the PAYE Scheme for which it is being submitted.
I've never tried to do that but would be very surprised if the submission wasn't rejected as invalid.

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Replying to Hugo Fair:
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By Nicky Richards
20th Jan 2022 20:25

We'll see. I have applied for a scheme today and said first pay date was 27 Sept 2021.
The clients didn't seem to know that they needed a scheme and money was paid out of the bank monthly and called salary. We'll see if the submissions are accepted and if penalties get issued.

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Replying to Nicky Richards:
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By Hugo Fair
20th Jan 2022 20:43

No harm in trying to see if you can get start date of PAYE Scheme dated in the past ... but I presume you saw my earlier response asking questions re what actually happened?

Not knowing something is, I am sure you know, no defence ... and simply taking money out of the bank & calling it 'salary' doesn't make it so.
Good luck.

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