PAYE RTI for dummies
my friend has a limited company and all his sales suffer cis tax and he also employs subbies as well.
He is the sole director and takes a salary of around £5k a year.
Currently has no other on the payroll, only subbies so fills in monthly cis returns.
That is the brief history!
He asked me if i know how he will be affected by the whole PAYE RTI that come into affect in April. I said i don't know as never really dealt with payroll before as we have always had a seperate payroll department so have little knowledge on the matter.
So i had a quick look on HMRC website but couldn't really suss it all out!!
Can someone enlighten me on what it actually is and how badly it will affect everyone's lives!!
What will my friend have to do differently going forward?
Don't want to appear to be being lazy and not reading into it for myself, so any lonks to good websites or articles will be fully appreciated as well.
Attended a presentation at Sage on RTI. First slide say:-
"RTI information has to be filed by ALL employers regardless of how many hours your emploee works or
how much you pay them"
"This includes employees under the LEL for whom you did not previously need to file an End of Year
"Casual workers who only work when you need them"
" Spouses employed in husband's or wife's business"
"Employees who only work a minimal number of hours and may noy previously have been on a payroll - Cleaners, Paperboys, Saturday Staff, Pot Collectors"
"Only applies to employees aged 16 and over"
So clearly your friend will need to register for PAYE - if not already registered. He will have to submit
information to HMRC each time he gets paid
and at the risk of sounding like an idiot....I assume this applies for CIS as well? But then aren't they doing this anyway when they fill out the monthly CIS returns??
Not an expert on CIS, but payments to subbies are not payroll, therefore not affected by RTI. So existing CIS
procedures will still apply.
Last edited by BIG WAL; 28-01-13 at 22:51.
Slightly off topic I know, but do you have any sole traders that pay 'wife's wages' of a small amount, say max of £30 p/w? If so, are you intending to set up PAYE schemes for these clients? I am considering this but feel it is a slight case of overkill!
Thanks for your opinions.
I think going by what has been said you will have to set up PAYE and tell HMRC every month you paid someone even if it was 50p and a mars bar!
A few points, no RTI is needed if the PAYE scheme is for CIS only, yet! Also if the client is a sole trader and pay wages of £30 a week then no P11 working sheet is required and hence exempt from RTI but be careful, if HMRC decides the employee should be on BR or 0T then that persons tax threshold is nil and hence a P11 is needed. The working sheet is not needed only if the employee is paid below the tax threshold and the NIC LEL.
Directors are employees for the purposes of PAYE and generally you require a P11 even if they are below the threshold but worth checking. Watch the payment date for wages, its not the same as the drawings so you may have to agree a notional date or use the easement to make it last day of the month.
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