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How to register for PAYE

PAYE (Pay as You Earn) is the most common form of employment tax contribution. As an employer, you are responsible for paying your taxes and organising the tax contributions of your staff. Let's look into PAYE registration.

Registering for PAYE as an employer

When you start employing staff or using construction subcontractors, you must register as an employer with HMRC. One of the most important parts of registering as an employer is setting up PAYE.

PAYE enables HMRC to automatically deduct income tax from your employees before you pay them. National Insurance (NI) contributions and Student Loan payments can also be deducted through PAYE.

When to register for PAYE

As an employer, you must register for PAYE before the first payday. Setting up your PAYE reference number can take up to five working days so it’s a good idea to register for PAYE a week in advance of your first payday.

Registering for PAYE in advance of your first payday is essential for all employers. There is a window for registration. You cannot register more than two months in advance of your first payday. This is important to remember for organising your payroll.

How to register for PAYE

When you register as an employer with HMRC, you’ll receive a PAYE reference number. This is a unique set of numbers and letters used to identify your business.

Once you receive your PAYE reference number, you can start the registration process.

Using the online form, you will submit information about your company to the HMRC. This will include:

  • National Insurance status of company director
  • Your business location (UK-based, EU-based etc.)
  • Information about any non-cash incentive awards (eg. Competition prizes, vouchers, additional holidays)
  • Name, address, contact details, type of business, and expected date of first payday

Even if you employ only yourself as company director, you will still need to register with HMRC as an employer.

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Sending payroll information to HMRC

You can send payroll information to HMRC either online or using a paper form. Most employers are now only allowed to submit payroll information online.

To check if you are eligible for paper submissions visit the government website section on online PAYE exemptions.

Payroll information is now submitted using an RTI (Real Time Information) system. This system electronically sends information to HMRC as soon as you pay your employees.

Employers are no longer allowed to submit payroll information to HMRC at the end of each financial year.

Dealing with late PAYE payments

PAYE bills must be paid to HMRC on time to avoid fines. Your PAYE bill must be paid in full by:

  • Monthly payments – the 22nd of the next tax month
  • Quarterly payments – the 22nd day of the month after the quarter ends (eg. 22nd June for 6th March to 5th June quarter)

If you’re paying by postal cheque, the deadline is the 19th day of the month.

Your PAYE bill is made up of various deductions payable to HMRC. These may include:

  • Income tax deductions for all employees
  • National Insurance contributions Class 1 and Class 1B
  • Class 1A National Insurance contributions (sporting testimonials and termination awards)
  • Student loan repayments
  • Payments to Construction Industry Scheme (CIS) subcontractors
  • Apprenticeship Levy payments (applicable for employers with an annual payroll bill of more than £3 million.)

There are various payment methods for your PAYE bill

These are dependent on the time required to make the payments:

Same or next day payments

  • Online banking
  • Telephone banking
  • CHAPS (Clearing House Automated Payment System)
  • Using your online bank account

Within 3 working days

  • Online using a debit card or corporate credit card
  • Bacs
  • At a bank or building society by either cash or cheque
  • Direct Debit (if you’re already registered with HMRC)
  • Postal cheque

Within 5 working days

  • Direct Debit (if you’re not already registered with HMRC)

If your PAYE payment is due on a bank holiday or weekend, you must make the payment on the last working day before the due date.

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Setting up PAYE FAQs

How do I register for PAYE?

You can register for PAYE online once you have registered with Companies House.

Can I set up my own PAYE?

Yes. Detailed guidance is given on the government website.

Do I have to register for PAYE?

Yes. If you are an employer, you must register for PAYE.

How do I get a PAYE number?

You automatically receive a PAYE number when you register as an employer with HMRC.

Can a sole trader register as an employer?

Yes. Sole traders can register as employers.

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