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As an employer, you have to work out and pay the Pay As You Earn
(PAYE) and National Insurance Contributions (NICs) for your staff. There is no
getting away from this. HM Revenue & Customs regulations have the force of law
behind them and misunderstanding or neglect are no excuse. Firstly, you have to decide who is an employee. The Revenue
defines employees as: - casual and part-time workers
- anyone who is an office holder, including directors
If you use contractors or self-employed people you may also have to
pay their contributions. This situation however is always changing and you will
need to keep abreast of it. You can ask your accountant, phone HM Revenue & Customs helpline on 0845 3003900 or visit
their
website for the latest information. Having decided who is an employee, during the tax year you
must: - deduct the correct amount of PAYE from your employees'
pay
- work out how much NICs you and your employees have to
pay
- keep a record of your employees' pay, and what PAYE and NICs
are due
- make monthly, or quarterly payments of the total PAYE and NICs
due to the HMRC
At the end of the year, you must send a tax return to the HMRC showing details of each employees total PAYE and NICs due. You must
also send details of certain expenses you have paid to employees, or benefits
you have provided them with, for example, company cars. You must give every employee who has paid PAYE or NICs and is still
working for you at the end of the tax year, a certificate showing their pay,
PAYE and NIC's details. Finally you must give your employees a copy of the
information you have given the Inland Revenue about their expenses payments and
benefits provided. Consider using an off-the-shelf computer package, or use a bureau
service, to help you complete these obligations. You can even use a payroll
service which will then obtain all the necessary forms. Remember - whoever and whatever you use - the obligation for filing
the returns is up to you as an employer.
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