PAYE Registration
PAYE (‘Pay As You Earn’) is a system set up by HMRC for the automatic deduction and payment of Income Tax at source.
As a UK employer, you can use PAYE to deduct Income Tax and National Insurance Contributions (NICs) from your employees’ wages each month. These deductions are then paid to HMRC on a regular basis.
Who Needs to Register for PAYE?
You need to register for PAYE if you are an employer and any of the following apply:
-
You have employees
-
You pay any employee more than £123 per week
-
The wages you pay are subject to Income Tax or National Insurance
Even if your employees earn below the tax threshold, it is advisable to register for PAYE if you provide taxable benefits (such as a company car or accommodation), or if you wish to maintain tax records that may affect their pension or benefit entitlements.
How to Register for PAYE?
You must register as an employer on the HMRC website and sign up for the PAYE system. Once completed, you will receive an Employer PAYE Reference Number and an Accounts Office Reference Number.
Typically, it may take up to 20 working days to receive your PAYE reference number. You should register at least 2 months before you begin paying your employees to avoid penalties from HMRC.
Responsibilities
After Registering for PAYE
-
Keep detailed records of employee wages, and associated tax and National Insurance deductions
-
Submit Real Time Information (RTI) reports on time, showing the latest employee pay and deductions
-
Make regular payments to HMRC, covering deducted Income Tax, National Insurance (both employer and employee contributions), and company pension contributions
-
Provide payslips, clearly showing gross pay, deductions, and net pay
-
Submit end-of-year reports and summaries: issue a P60 form to employees, summarising annual pay and tax, and a P45 if an employee leaves your company
Consequences of Late Registration
or Non-compliance
If an employer fails to register for PAYE on time, HMRC may issue penalties. There is no fixed amount for fines; the amount depends on the length of the delay and whether it was a deliberate act of evasion.
Furthermore, failing to register or submit reports on time may prompt a more detailed and rigorous audit by HMRC, potentially increasing your administrative burden.
Success Stories
Client B: The expert tax advice from TB Accountants resulted in significant tax savings for our business.
Client A
Client E
Client C: The audit services from TB Accountants ensured our compliance with regulations and improved our financial transparency.
Client B
Client F
Client D: TB Accountants' consulting services provided us with strategic insights that boosted our business performance.
Client C
Client G