I have been asked an odd question about PAYE - who to ask?

[LaTrucha]

I am just going back to work part time after having children. I haven't been employed for 6 years so I'm feeling a bit rusty. My new employer has asked me if I need to 'be involved with PAYE' and can I look into it.

I will be earning (from them) only about £340 a month, so I know I will not be liable for Income Tax, but I presume I will have to make NI contributions from that, so therefore will need to be 'involved with PAYE'. Is that correct.

Also, I have just started seasonal work for two other organisations. I don't think that this will take me over the bottom limit for paying Income Tax, but I presume I will need to declare it all to the tax man. I have forgotten where I get the forms for this.

Where can I go to get help? I have started looking at the HMRC website, but is is (ahem) not very clear.

If its a job and not you running a business providing them with a service, then its likely to be PAYE.

If they pay £109 or more in ANY week this financial year, then the employer has an obligation to operate PAYE.

www.hmrc.gov.uk/paye/intro/basics.htm

The seasonal work - is that £109 a week or more?

The employers should be the ones who ask hmrc for info in my view.

It's 40 hours a month at £8 an hour.

The seasonal work is very variable, but would be more like £500 a week.

Would HMRC be helpful if I phoned them, do you think?

I thought it was a bit odd to be asked, but it's a small local charity, and I'd probably be administering thePAYE in the end, so it doesn't hurt for me to know now, I guess.

"If they pay £109 or more in ANY week this financial year, then the employer has an obligation to operate PAYE."

This is only true employees that are paid weekly; for monthly paid employees the threshold is £473 per month. You can earn £646pm in each job before you have NI deducted.

As an employee you don't have to report anything to the tax man unless you are asked to complete a self assessment tax return, or you have other income on which tax is due.

Note that the employers for the "seasonal work" will have to operate PAYE as you will already be employed.

Thanks for that. I think I understand where I stand now, so I can explain it to them as I don't think they do. We'll see.

How would your stamp be paid though, if you earn enough to be eligible even if not enough to pay NIs

I wouldn't earn enough to be elligible for Income Tax.

As I understand it, if I were employed the employer would be responsible for reporting to the Inland Revenue regardless of how much I earnt. If I were self-employed, I would be responsible fo rit myself.

What I have yet to work out is whether it is best for both or either of us for me to be employed or self-employed - but I do have the phone number to find out!

You're quite right LaTrucha. It's an employer's job to sort out your employment arrangements with HMRC. They are going to have to notify them of your name, address, NI number, DOB etc whether you pay tax or not, and report your pay figures monthly, under a fun new scheme called RTI (being ironic). So they need to be up to speed on all this.

Your other employers also need to know your details, including NI number and whether you have other employment.

If in doubt, do phone HMRC.

"As I understand it, if I were employed the employer would be responsible for reporting to the Inland Revenue regardless of how much I earnt."

No this is NOT true. If you are the only employee and you earn less than £109 and have no other job when you start working for them they do NOT have to report anything to HMRC.

Thanks. Yes, I did have an inklig about that. I have the number that my employer could ring at HMRC, but I think I'll give them a ring myself.

I will be employed by other people, just not all the time.

actually under RTI and earning below the threshold you must report now to HMRC and be included on the payroll

Its for when Universal credits come into operation later in the year

If you are paying anyone any amount - they must now be on the payroll

I think the rules for no reporting are staying the same hence why RTI is not fit for purpose yet

ie. if an employer has only employees who do not work elsewhere and earn under £109per week, there is still no requirement to operate a paye scheme at all.

A P46 still needs to be completed for employers not operating paye scheme though. So long as all employees have ticked box A and earn under the limit no reporting is required.

"actually under RTI and earning below the threshold you must report now to HMRC"

@ChablisLover as ThingummyBob says this is only true if you are registered with HMRC as an employer. If you are not required to register (because you satisfy the conditions mentioned in my post i.e. no employees earning over £109pw or with other jobs) then (obviously) you are not required to report.

"A P46 still needs to be completed for employers not operating paye scheme though. So long as all employees have ticked box A and earn under the limit no reporting is required."

This is not strictly true - in fact form P46 is not required at all any more. The employer still needs to satisfy himself as to the employee's status though, but this can be done by including the same questions as on a P46 on a "new employee" form.

From op's messages it seems she would be operating the paye scheme. Is there one already in place? Some of the small charities I work with do operate a paye scheme as sometimes there are paid shop managers etc who are over the threshold.

I was reading that a paye scheme was in place.

I do agree if below threshold there is no need to operate a scheme but many do for accounts purposes especially if part of much larger organisation.

I think it is in place: that is to say, when they asked me they also said something along the lines of they would be glad to be rid of it as it was so fiddly. I was surprised at is is a well-known national organisation, although a small local branch.

I don't know if I will be operating it or not, really, although I suspect I will. I think they will probably be quite pleased if I'm clued up about it though.

If there is a system already in place then you must be put onto the payroll no matter what you earn nowadays.

Hmrc are unlikely to wind it up when they are aware there are employees being paid there. Especially in the days of universal credits.

MrAnchovy you are no doubt correct about the P46. I was a little about having to get paper P46 from a sole employee in a non paye operating organisation when I heard it said and haven't been arsed to check facts as its not come up at all so far

Would you believe me if I told you I heard it on a HMRC run seminar for the introduction of RTI

Chablis I've closed several Paye schemes in recent weeks. (well end of 12/13) The rules are the rules and HMRC cannot enforce additional admin burdens onto small organisations when there is no legal requirement for that burden.
Just pointing that out as a general thing so OP can be aware

Thanks thingummy

I never knew that at all.

I've closed schemes in past set up to pay directors (who were never paid - but that's a whole other area) but not employees under the threshold.

Learn something new everyday

Rti is a bummer though. It's a whole new burden on small employers.