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Practical experience of a PAYE merger

Does anyone have practical experience of doing a PAYE scheme merger.

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Hi everyone,

I have a new client who has been operating two PAYE schemes after they bought a business some years ago. The two PAYE schemes are within the same limited company and only really represent different departments.

We are trying to streamline their processes and moving accounting software from two systems that currently process each department separately due to payroll and the way those running the business thought would be the best way to monitor each department.

The company only operates one VAT registration, so up to now, they have run the VAT100 report in each accounting software file, combined the two and submitted on the HMRC website.

MTD, moving to the cloud, and just simplifying the bookkeeping process for the client are meaning that I am looking to put the company into one accounting software file. The software I use does not allow for two PAYE schemes.


My question is really to ask whether anyone has any experience of merging PAYE schemes, problems to look out for, and any suggestions to make it as quick and simple a process as possible!

Thank you very much for any help you may be able to offer!


Replies (5)

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By paul.benny
12th Jul 2019 12:45

It's fairly straightforward - you make everyone a leaver in the old scheme, issuing P45 etc and add them to the new scheme as 'new starters'. You can then do all the year end procedures in the old scheme and close it.

The client may want to employees of the change of PAYE reference but should avoid issuing them with the P45s as this will only confuse and alarm.

Thanks (1)
By LucyCharles
17th Jul 2019 13:25

You might want to consider continuity of employment letters to the employees?

Thanks (0)
By JoF
17th Jul 2019 13:34

Ditto what the other two said.

Worth advising staff their Bank account will now show the wages coming from 'x' business name, just heads off a raft of queries.

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By ikh
17th Jul 2019 14:51

Unless things have changed recently, the staff will probably end up with unwarranted PAYE code changes as the HMRC RTI system processes the changes.
It appears to assume that people have two jobs even when the PAYE reference remains the same.
As previously mentioned this will mean some 'hand holding' for the workforce involved

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By pauljohnston
18th Jul 2019 08:05

Although sometime off you may do better carrying out the "merger at the tax year end". Less things to upset HMRC and the staff.

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