help with a snip?

Model500

Hi I have just taken on a new client who is a hairdresser. During 14-15 tax year he acted as a sole trader and from Sept 2014 through to end of that tax year (5 April 2015) he employed one person for 8 hours per week at £52.00 per week. His employee has today asked for a P60 (her accountant needs it, presumably for her own self-assessment) however as she was only earning £52 per week she didn't fall under PAYE requirements.

My queries:

1. If this person was also employed elsewhere which, she apparently was, then does that change things in respect of PAYE reporting?
   
2. The hairdresser isn't very tax / PAYE savvy which he readily admits however, what should I do in this situation?
   
3. He has kept good manual records so we can work out what the employee earned during the year but has he fallen foul of the PAYE system by not registering?
   
4. Is there such a thing as a manual P60 or could he just provide a spreadsheet summary of all the payments made in 14-15?
   

Another query I have is that the hairdresser hadn't realised that tips were taxable and hasn't kept records of them. What would HMRC's view be of this? Is there such a thing as a 'reasonable tips' income table for different trades?

A quick response for my first query would be very much appreciated.

Thanks

Model500

thanks mrme89, that's very helpful

re: (2) yes that was a bit scrambled! a bit like my mind at the moment, so much to think about during the tax return deadline run-in. arrrgghhh!

so to clarify, my plan of action should be:
(1) get the hairdresser to provide a statement of earnings to his employee with instruction to enter paye ref 000/N (googled it and you're correct!) on the self assessment form. Job done.
(2) get the hairdresser set up for PAYE asap after January tax returns. I'm assuming I have a duty to alert HMRC to the fact that he should have registered during 14-15?

once I've done (2) do you think would HMRC levy any penalties against my client?

any ideas on the 'tips' question?

MarieNoelle

His responsibility as an employer would have been to ask the employee to fill in a starter check list where she would have declared she had another job. She may have had to be taxed through Paye in the first place so your client may have missed withholding tax at source. Probably best to register now for PAYE and submit an earlier year return for 2014-15. I would call HMRC to inform them of the situation and try and mitigate penalties?

Model500

Thanks MarieNoelle, yes I am going to contact them first. I think my client is learning rather a lot in a short space of time! Hopefully my client won't be in line for penalties but he at least now understands the gravity of not registering for PAYE. Onwards and upwards!