Sole-traders and partnerships with employees register for Pay As You Earn (PAYE); all trading limited companies will need to register too. It takes 4-6 weeks for your tax office to process the application. The UK tax year runs from 6th April to 5th April each year. Each month a PAYE slip is sent to HMRC showing all tax and national insurance due for that month ( 6th – 5th i.e. month 1 of the tax year runs 6th April to 5th May; month 12 runs 6th March to 5th April).
PAYE is due by the 19th following the end of each tax month (i.e. the due date for tax month 1 is 19th May) - payment can be made by cheque, electronic transfer or direct debit.
At the tax yearend, 5th April, a summary of all employees’ wages (form P35) and the individual details for each employee (forms P14 / P60) are prepared. These forms are then filed electronically; if Virtue is acting as an agent we can produce and file these for you.
P11d returns for each employee, showing expenses and benefits for the tax year, are due by 6th July, along with a P11d(b) form calculating the Class 1a NI owed by the business on all employee benefits. P11ds and the P11d(b) are filed electronically and something we’ll help with as part our bookkeeping and payroll service. P11d benefits should be recorded on your personal tax return so they can be taxed.
Payroll requirements will vary; Virtue can either run separate monthly pay runs or produce a summary at the beginning of the year so you can set up bank payments in advance. In order to get started we’ll need a P45 from your previous employment. Keep to the same pay date each month.