Company Formations & Start-ups

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PAYE & Payroll Explained

PAYE – Pay As You Earn – is HMRC’s system for collecting Income Tax and National Insurance from your employment. As an employer, it is your responsibility to keep records of your employee’s details in order for the correct tax to be paid to HMRC.

Your payroll provider is responsible for using these records to determine how much each employee is to be paid, and how much tax should be taken per payment.

The legalities
You are only exempt from PAYE if your employees are paid under £112 a week, receive no expenses or benefits, pensions, or income from another job. You must register as an employer with HMRC and get a login for PAYE online. You should keep records of employee details and pay, and choose a payroll software program to store these.

Your records must include:
  • What employees are paid
  • All your reports made to HMRC
  • Employee leave and sickness
  • Tax code notices
  • Any taxable expenses

These must be accurate and kept for 3 years from the end of the tax year they relate to – if you do not keep full records, HMRC can charge you a penalty of up to £3,000.

What are my options when organising PAYE?
PAYE can be operated by either running payroll yourself using software, or by using the services of a payroll provider to do this for you.

Here at Janette Allen Limited, we provide a comprehensive payroll service to help your business run as smoothly as possible. Our years of experience in this industry has allowed us to provide a high quality service to all our customers, with an expert team on hand to provide assistance with your payroll and PAYE requirements.