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Paying staff and PAYE


Your limited company is required by law to register for Pay As You Earn (PAYE) scheme and act as tax collectors for HM Revenue and Customs (HMRC) if you are hiring staff and paying them salaries and wages.

Does one man company required to register for PAYE?

For a limited company, where the director is also the owner of the company, as long as the director is withdrawing monies from the company through salary and bonus payments, the company must register for PAYE scheme and submit PAYE forms with HM Revenue and Customs.

The director is considered a staff or employee of the company.

Real Time Information Reporting

Payroll and staff salary processing must be on Real Time Information (often abbreviated as RTI) reporting with HMRC.

This means each time you make a salary or bonus payment you must report the income tax and national insurance contribution payable by the staff and your company before or on the payment date by submitting FPS form online.

If your company has notified HMRC that your payroll will on monthly basis and if in any a particular months no salary was made you must submit the form called EPS with HMRC stating zero payment was made.

Your company will be the employer and has the responsibility to ensure correct income tax and national insurance contribution are deducted correctly and pay over to HMRC.

Payroll software

Do not panic, there are few payroll software available off the shelf and also online payroll software that are price reasonably you may use and they normally provide technical support for new customers on how to operate their payroll software including online submission with HMRC.

Concise Accountancy - complete payroll solution for businesses

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