HMRC - Meithrin

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Before starting to pay the staff, you’ll need to register as an Employer with the HMRC for PAYE purposes. PAYE stands for Pay As You Earn, and you need to register for this so you can send details about the staff’s wages, income tax, national insurance, and anything else regarding their income away to HMRC every month.
To register, click on the below link and provide the required information, i.e. things such as the business’ name, address, start date, staff pay date, etc:

https://www.tax.service.gov.uk/shortforms/form/EMPREG_CharComm

Registration as an Employer only needs to be done once right at the beginning of operations, so if you are a new Treasurer taking over, this will more than likely be in place already, and the details will be with the previous Treasurer or your external payroll provider if the Cylch pay someone external to run the payroll on their behalf.
After completing the registration, a letter will arrive to the address provided in the registration process within a fortnight, and will contain 2 references, a PAYE Reference‘123/AB45678’, and an Accounts Office Reference‘123AB45678910’. These will be unique to your payroll and will be used to identify the information you send to the HMRC each month, and then these PAYE details will be put against your company’s PAYE account.
You can also open an online PAYE account on the link below, and with this, you’d be able to keep an eye on things such as changes in the staff’s tax codes, any outstanding PAYE bills, and anything else relating to your payroll. The details of every RTI you submit will be shown on your online PAYE account.

https://www.gov.uk/paye-online/enrol

RTI needs to be sent to HMRC monthly, or weekly if staff are paid weekly, in the form of a FPS (Full Payment Submission) through the payroll. It’s called RTI as the information needs to be submitted in real time, i.e. the information needs to be submitted to HMRC on the staff’s pay date, and no later.
The RTI will include the details of everything about the staff’s wage for that particular period, i.e. the total gross pay, income tax, national insurance, any student loan deductions due any statutory payments for maternity/paternity periods, and anything else included in their wage
From this information, the HMRC will calculate the monthly PAYE bill.

The deductions seen on a payslips, i.e., income tax, student loan and national insurance need to be paid over to the HMRC, by the Employer each month.
There are a few things to be aware of that may be deducted from the monthly PAYE bill. One of these is the Employment Allowance. Unless you paid over £100,000 of employer national insurance in the previous financial year, you are likely to be within the eligibility criteria to be able to claim this, which would mean that you do not need to pay the first £4,000 of employer national insurance each financial year. See the link below for the full eligibility criteria:

https://www.gov.uk/claim-employment-allowance/eligibility

Another thing that gets deducted from your monthly PAYE bill is any statutory maternity/paternity/adoption pay you pay to a member of staff. A minimum of 92% of this payment will be deducted from your PAYE bill for the month, but this percentage will be 103% if you are eligible for Small Employers’ Relief (SER). You will be eligible for SER if your total employer national insurance for previous financial years were less than £45,000, which is very high, and you are very likely to be eligible to claim the higher percentage.
You’ll be able to get a report from your payroll software that will work out your total PAYE bill for the month, and you’ll need to pay this total over to HMRC between the 5th and the 22nd of the following month, e.g. for September wages, the corresponding PAYE bill must be settled between the 5th and the 22nd of October. There are many different ways you can pay, e.g. cheque, internet banking, by card or by direct debit, see the link below for the full details. You’ll need to use your Accounts Office Reference as your payment reference when doing so.

https://www.gov.uk/pay-paye-tax

The appropriate percentage of any of the above statutory payments will automatically be put against your PAYE bill, there is no need to do anything extra for this to be implemented.
If a member/members of staff is on leave for one of the above reasons, and the percentage of the statutory pay you can claim back is higher than the PAYE deductions (income tax, national insurance and student loan) for the month, then you will be in credit with the HMRC, and instead of having to pay your PAYE bill as usual, they will in fact owe you money.
Example: If the SMP payments for the month are £500, and you’re able to claim back 103 % of this, so £500 x 1.03 = £515, and we’ll say that the staff’s PAYE for the month comes to £100, then: £100 – £515 = -£415, i.e. the HMRC has £415 to pay back to you for the month.
HMRC will not normally pay this money back into your bank account, but instead, the credit will be carried forward on your account until the balance clears and becomes positive again, i.e. you owe them money again. If you cannot afford for this to happen, you may contact HMRC, and request for the money to be paid over to you, details on the below link:

https://www.gov.uk/recover-statutory-payments

You’re also able to claim these statutory payments in advance if needed, and you’ll be paid one lump sum for the entire duration of the statutory leave paid in to the Cylch/nursery’s bank account before that member of staff starts their leave. This can be done through your online PAYE account if you have one, or by filling in the appropriate form on the bottom of this following link:

https://www.gov.uk/government/publications/statutory-pay-apply-for-advance-of-statutory-parental-paternal-adoption-and-maternity-pay

This will benefit any Cylch/nursery that may not be able to pay for a member of staff’s maternity pay, and pay for the new member of staff needed to cover the hours that the individual on maternity leave would have been working for potentially the next 9-12 months.

When a new member of staff is employed the employer will need to provide the appropriate information to the HMRC
For the HMRC to have the correct information, the individual will need to fill in a ‘Starter Checklist’ form, which is available on the HMRC website (link below), then you or whoever runs the payroll on your behalf will use this form to add the new employee to the payroll. On the form will be questions asking for things such as name, address, national insurance number, employment status, any outstanding student loan deductions etc., and all of this information will be inputted into the payroll to ensure everything starts off on the right foot in terms of the individual’s wages and deductions

Starter checklist for PAYE – GOV.UK (www.gov.uk)

After adding them to the payroll, and processing the first wage details, all of this information will be forwarded to the HMRC as part of the FPS (Full Payment Submission). They’ll be able to see all the different income sources for this individual all in one place, to ensure everything is correct when it comes to any income tax, student loan and national insurance deductions
The Starter Checklist on its own will be sufficient to add them to the payroll if this is the individual’s first form of employment in the current financial year, or if they still have another form of employment.
If they have left another form of employment, and they are starting their employment with yourselves within the same financial year, they should have a P45 form from their previous employer that will have relevant information to be inputted into the payroll as well

This is the form that’s produced when an individual leaves their employment and are taken off the payroll. You or your payroll provider will need to make sure you give this to any employee who leaves your employment.
On the P45 will be details such as leave date, their tax code on their leave date, how many weeks or months in the current financial year, how much income and tax they have received or paid in the current financial year etc.
If an individual leaves a job and starts a new one within the same financial year, their P45 from the job they left can be given to the new employer alongside the starter checklist (not instead of), and then whoever runs the payroll can input the relevant details with regards to the income received and tax already paid in that financial year to date by the individual, This will ensure that everything is up to date and that there will be no under-payment or over-payment of income tax come the end of the year.