PAYE and NIC
The basic objective of 'Pay As You Earn' (PAYE) is to collect and
account for taxation on employment income and both employees' and
employers' National Insurance Contributions (NICs). The system is,
however, being increasingly used for other purposes, which have
nothing to do with taxation and national insurance. Some of these
are payments of working tax credits and collecting student loan
repayments. Employers do all of the work here without a pat
on the back if it is done correctly. However, they are penalised
if it is done incorrectly.
Employer's Records and Year End Returns
Details must be provided to the Inland Revenue at the year end for
all those who are or have been employed in that year, at a rate
of pay equal to or exceeding the Class 1 National Insurance lower
earnings limit (£84 in 2006/07). Details of all employees
to whom working tax credits have been paid must also be provided,
regardless of their level of pay.
Employers must transfer the details from the employee's
record onto the Employer's Annual Return (form P35) and prepare
their P14 forms. Form P14 is split into three parts; two parts are
sent to the Inland Revenue (one of which is for National Insurance
purposes) and the third part is form P60. This must be given to
the employee as it shows them total pay, National Insurance, statutory
sick/maternity pay and working tax credits.
The time limit for sending in forms P35 and P14 is 19th May following
the end of the tax year; automatic penalties are payable by employers
who do not send in these forms on time. The penalty payable is £100
for every 50 employees per month, or part thereof that it is late.
A director may be held personally responsible for unpaid NICs due from the company they are a part of,
if the non-payment is due to their fraudulent activities or negligence.
For a minimal fee, Academy Accounting Ltd can complete
all of these complex forms for you. As an added extra, if a company
has 1-49 employees, their P35s can be completed online, which would
give them £250 tax free back from the Inland Revenue. This
is yet another reason to entrust us with your Inland Revenue forms,
as we have the system and experience to do them for you, without
risking possible penalties.
Benefits in Kind
For those employees who receive benefits from the company, such
as a company car or van, or those to whom expenses are paid, details
of these benefits must be declared on form P11D. These forms are
required to be submitted by employers by 19th July, and where Class
1A insurance is chargeable, such fees are due by the same date.
Academy Accounting Ltd will be pleased to:
- Operate your PAYE;
- Prepare all forms necessary; and
- Prepare benefits in kind statements.
A great service at a great cost is what Academy Accounting Ltd
is offering. To find out more, call us today on 0141 891 5999 or
e-mail us at enquiry@academyaccounting.co.uk.
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