PAYE

Pay As You Earn (PAYE) tax rules are complex and wide ranging and it is unlikely that someone running a small business will have enough expertise in the field to fully understand how it works. It’s a good idea then to employ a firm of tax advisers such as Pros Assist who will be well placed to guide you through any difficulties and ensure that you do not break any HMRC rules.

There are fairly comprehensive guides to the subject on the website http://www.hmrc.gov.uk/ for those with the confidence to try it themselves but it is always helpful to have professional advice available as well. When a business employs people their payroll tax records have to be set up correctly with HMRC and using a dedicated software package is the best way to do this, although records can be set up manually as well.

Once payroll records are in place the information provided might be constantly updated as employees come and go or their personal circumstances change. Any changes have to be notified straight away to ensure that the person affected has the right tax code and is therefore being deducted the correct amount from their pay. Changes in marital status, maternity and paternity issues and long term sickness are all things that can affect a tax code.

It is important that a company, however small, pays the right amount of tax to HMRC but mistakes can happen on both sides. The important thing though is to recognise that something is wrong as early as possible and to correct it quickly. HMRC can impose fines on companies who flout the rules or deliberately withhold payroll information. The best way to keep on top of all this is really to make use of the experts at Pros Assist.