Do I need to register with HMRC for PAYE?

Hillier Hopkins LLP

Chartered Accountants & Tax Advisers

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A question that is commonly asked by directors of a business that does not employ any staff is whether they need to register with HMRC for PAYE?

Last updated on 17.01.2024

The need to register with HMRC for PAYE will depend on two key points – how much you take from the business as a salary and whether you receive any additional benefits, such as a company car / health insurance.

If your salary level is below £123 per week (£6395 or below for the year) & you receive no taxable benefits from the company, then you do not need to register a PAYE scheme for the company with HMRC. This is because the salary will be below the lower earnings limit. It is important to know that at this salary level you will not have a qualifying year for state pension purposes.

Many directors choose to pay themselves via a combination of salary and dividends. It is possible to draw a salary of up to £12,570 without paying any tax and National Insurance. Whilst this salary level may not create any liabilities to pay to HMRC, the salary will need to be reported to HMRC via a formal PAYE scheme in line with when the salary payments are made (referred to as Real time information). It should be noted that the Chancellor has fixed this allowance until 2028.

Once registered with HMRC, you will be required to keep comprehensive records of salary paid and deductions – online accounting software, such as Xero can make this much easier.

If you would like to speak to one of our experts email or call +44 (0)330 024 3200 and they will be happy to assist.

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