[nat1]

Hi all

My new employee is earning below the Tax/Nat ins threshold so after just speaking to HMRC I just need to keep hold of her P45 until she exceeds this.  My problem is I want to issue her with a proper printed out payslip rather than a written 1, but Payroo who I have used before require a Tax code which I have not got as I have not needed to register this employee, if anybody can advise on this, it would be greatly appreciated.

Thanks in advance!

Nat

[Adam P]

i thought you'd need a tax code for everyone. how do you know this person is below the tax threshold and doesn't earn else where and says the same to them? the tax code you use would be the standard 647L which your p45 should say iirc. you then submit the p45 to hmrc and they check make sure it's all correct. could be wrong but that's the impression i get

[nat1]

Hi, I know she does not have a job else where as she is a family friend, I have her P45 and the code on that is the emergency tax code, after speaking to hmrc, they said keep her P45 till she reaches the threshold, i agree with you and presumed everyone would have a tax code which i need to set her up on Payroo.

thanks for your reply!

Nat

[Pristine Clean]

Hi Nat

Do you have an accountant?

They will be able to advise you easily and perform payroll with professional payslips.

Your accountant will ask for all the details he requires to process everything. Very simple.

Dave

[Adam P]

if she's on the emergency tax code then you should be using BR for the payslip and she should be paying 20% tax. however if this is her only job she should have ticked option 1 which would give the tax code 647L to use and then she wont get taxed until she hits the threshold. you don't need to send the p45 in then to get the correct one to use as the p45 tells you which one

[Denise l]

If you send the P46 off  to IR, they will then issue with an official tax code. Keep a copy of P46 in your file.

[SharonM]

Hi
 
Sorry bit of a late reply but I only joined the other day!

Most of my staff, only 8 at the moment as I am a very small business, earn below the threshold as they only work around 12-15 hours a week. They are all Mum's that are home with their children during the day so they do not have other jobs. 

I use Sage Instant Payroll, I set them all up with the tax code as 647L and when I run the monthly salaries this prints a wageslip showing zero tax and NI.  Then in April I file my PAYE online showing all the zero's.

I have one lady who has another job as she teaches during the day so she is on the BR tax code and the Sage software deducts the relevant amounts, I pay her minus her tax and then pay the PAYE bill to the Inland Revenue on a quarterly basis.  When I do the PAYE in April, it shows the amount for the year, which tally's with what I have already paid and then shows as 'Nothing to pay'.

Hope this makes sense!

Sharon

[Gilbert Sprous]

I think the information you have from HMRC is misleading and you need to get that clarified.  Everyone has to have a tax code of some sort.  It sounds like she had a second job that she gave up.  You said that you know she is currently working.  A p46 should be done and sage or your payroll software should put her on BR (sometimes this is refered to as emergency tax code but it comes out to 20% or close to it).  The next step is something that I have helped a few of my employees out with.  The employee can call and request their tax code be split.  If they hold two jobs and the larger earning job falls below 6470 then the excess can be used on a second or even third job.  If you want a print out that I give my employees that need to do this let me know.  It is not that hard and sometimes HMRC
will catch it themselves and just send out a notice of new tax code (or whatever it is called) but it may take longer than just asking for it. 

If they pay taxes to you before they get their tax code sorted your software should catch it when you put it in and then you will have a negative amount for that person the next month when the tax code is inputted and of course a negative deduction equals a positive to the employee if you follow me.  As long as you or other employees are paying taxes it will even out the software will take care of it. 

They will need the tax reference number for your business and the other business that they want to split between but this should be on their paystub for the other place and of course you know yours.  Oh and another thing is if you have no tax code how will you be able to issue a P60 at the end of the year?  I think you really need to get back with HMRC about that one.

If there is any questions about the above just let me know.

Gilbert

[Alan McTernan]

My book-keeper deals with my payroll that way there is no mistakes or problems and her and my accountant work with each other

My advice get a book-keeper......for what it costs, it gives me time to spend quality time with my family

[nat1]

Hi
Many thanks for your replys guys! if I have called HMRC once I have called them a trillion times!  because she is under the threshold and does not have another job, they are not interested as basically they are not getting anything out of it.  I was told to just buy payslips from "Staples" and write them out and keep her p45 till she exceeds the threshold.  Seems quite ridiculous to me, as at the end of the day I am an employer and wanted to register as one, but they was not interested.


Nat

[Gilbert Sprous]

I have to say I am sorry because I thought you said you knew she had another job, but when I went back you had stated you knew she did not have another job.  I know longer submet P45 or P46 manually I have gateway and do it electronically and through my Sage payroll, that does it for me when I go through new starter wizard. 

I know that you said that this is a family friend but, there is no way to have a P45 that has a BR on it without there being a second job or Taxable job seekers allowance, or a state pension.  When she was accepted at the employer that issued the current P45 she would of had to fill out a P46 that stated one of the above, and that employer put her on BR.  A P45 from previous employer or from HMRC in the case of job seekers allowance was not given before  she left so the P45 given shows a tax code of BR.   That is the only scenario that I can think of that a person would end up with a P45 showing BR.

Now I know this for a fact.  If this is her only job and she paid taxes on the last job your software will have you pay her the back taxes if she has not hit the thresh hold.  You get to claim it as a credit to HMRC but it will still come from you.  I know this as I hired a guy that made quite a bit before the company that he worked for went under.  He took part time work from me.  His last job took out taxes like he would be earning that for the whole year.  If I remember correctly, he made like 300 pounds off me the first pay check but I ended up paying him almost 800 pounds in tax overpayment, the other 500 lessened my tax obligation for that month, but believe me I called HMRC before I made the payment.

I would have to agree with others if you cant get HMRC to give you a straight answer.  You need to talk to an accountant.  You can not have an employee that is not registered as being employed by you  with HMRC.  You have no paperwork to issue a P45 or P60.  I think that if it is not resolved and there comes an investigation you could be in trouble.  I know it is a friend but I would say you need to figure this out as soon as you can.

Gilbert

[Denise l]

Employees are allowed to earn £97 per week without paying tax or NI. Get them to sign a P46 (download from internet) and keepmit in your employee file. You dont need to give them a P45 when they leave, just a statement of how much they have earned with you for the year. I checked the same thing out with IR.

Denise

[Scotbrite]

I would get her to fill a P46 & send to HMRC. Put her on BR tax just now ( as option 3) on p46. This will allow you to put her in on payroo, which i also use & when HMRC give you a tax code & you enter tjis the system will correct things

Cheers,

Ron