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A new employer needs to register with HMRC as an employer and operate a PAYE scheme and make important checks on each new employee recruited and complete the initial paperwork to set up the employees pay records of tax national insurance and personal details and inform HMRC the employee has started.
Initial P45 checks for PAYE and new employee pay status
Taking on a new employee is a relatively simple process but if errors are made they can be costly. Most of the initial information required to set up the PAYE records are contained in the P45 tax form the employee should present to a new employer. If a P45 form is not available then the employee should be given a P46 and asked to complete it.
Important checks include determining the new employee tax status as an employee rather than self employed. Always adopt an approach of employee unless the new [url=http://www.vivid-host.com/barbour.htm]barbour uk[/url] recruit specifically provides services only and there [url=http://www.1855sacramento.com/peuterey.php]giubbotti peuterey[/url] is an agreement stating those services and none of the rules that could indicate potential employee status are present.
There are numerous rules that destroy the self employed status such as using business tools rather than own, taking a company vehicle home at night, working for one employer and many others. If [url=http://www.mansmanifesto.com]www.mansmanifesto.com[/url] anyone self employed is later determined to be an employee the money paid to them, the employees pay, would be regarded as net wages not gross with the employer responsible for the income tax national insurance contributions employees and employers which had not been deducted, interest and penalties too..
One important payroll check if there is a gap in the paperwork is to make certain the new recruit can be legally employed. If there are any doubts, missing information such as previous work [url=http://www.orlando-apts.com/nfljerseys/]nfl jerseys[/url] history or lack of [url=http://www.rtnagel.com/louboutin.php]louboutin[/url] a national insurance number then contact the job centre to determine the employment [url=http://www.lcdmo.com/hollister.php]hollister co france[/url] status.
If the new employee is from outside the UK, it is the employer responsibility to ensure that they are entitled to work before they start working for you. The government has recently introduced checks employers must make on all new employees as a safeguard from employing someone illegally.
Checking the P45 form of a new employee
The P45 [url=http://www.1855sacramento.com/woolrich.php]woolrich bologna[/url] tax form is in 4 parts and is the [url=http://www.orlando-apts.com/nfljerseys/]cheap nfl jerseys[/url] record of the cumulative gross pay and income tax deducted to date in the tax year and forms the basis for the PAYE record. The previous employer sends part 1 to HMRC PAYE tax office when that employee leaves and has a legal responsibility to give the employee parts 1A, 2 and 3. The employee retains part 1A and gives the new employer parts 2 and 3 to calculate the employee tax.
In receipt of [url=http://www.gotprintsigns.com/uggpascher/]ugg pas cher[/url] parts 2 and 3 the new employer should check the national insurance number is entered, and that the gross pay and income tax shown on part 2 agree with the same amounts entered in part 3. The new employer should also check the income tax deducted is correct according to the gross pay received at the employee date of leaving. The new employer then retains part 2 for a minimum of 3 years after the financial year and completes part 3 and sends it to the PAYE [url=http://www.sandvikfw.net/shopuk.php]hollister sale[/url] tax office immediately.
If the P45 form shows the wrong tax deduction, calculate the correct tax and enter it on part 3 which is sent to [url=http://www.seattlesoycandles.com]hollister[/url] HMRC. The correct tax calculated entered on part 3 should be used in the new employer PAYE system and not the erroneous figure on part 2 of the P45 form. Employers can submit the P45 online, in fact from April 2009 all employers with over p45 must do [url=http://www.rtnagel.com/airjordan.php]jordan pas cher[/url] so and other employers will also do so by 2011.
New employee doesn't have a national insurance number
If a new employee does not have a national insurance number apply a temporary number, say AB123456C can be used until the correct number is obtained. Records must be kept of the employee name, address, date of birth, gender, all payments made and deductions and immediate action taken to obtain the national insurance number.
If the employee has never had a national insurance number they must contact the job centre to obtain one. If the employee has had a national insurance number but lost it the employer should ensure the P46 details are accurate so the employee NI number can be traced by HMRC who will then notify the new employer in due course.
If a new employer cannot obtain the employee national insurance number apply for a form CA6855 which has to be completed and submitted to the national insurance contributions office to trace the number.
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