An Employer's Checklist
Employee Leaving (P45)
Whenever an employee leaves your employment you are required by law to provide them with a form P45, which we will issue on your behalf. This form summarises pay and tax received in your employment (or in the current tax year, to date) and enables the next employee to deduct the correct amount of income tax. Therefore please advice our office promptly before an employee leaves, or as soon after their leaving date as possible.
Payment and Information Deadlines and Penalties
All quarterly tax and NI payments are due to be paid to HMRC by the 19th of the month following the end of each calendar quarter. Enable Payroll will advise you accordingly in good time. For new employers the first payment will only be due once your new PAYE scheme has been set up by HMRC, and you will not be penalised if this is after the due date for any of the first three quarters of the tax year (starting in April). Enable Payroll will submit an employer's Annual Return and Declaration (P35) electronically at each tax year-end on your behalf, which in most cases will automatically qualify you for incentive payments from HMRC.
Any changes to employment arrangements should be notified to us promptly, especially during this period as any delays in filing before-mentioned forms will trigger automatic Inland Revenue Penalties, and we have a large number of returns to complete and check on our subscriber's behalf in a very short period of time.
Redundancy Pay
There is a lot of confusion in this industry on the issue of redundancy. Many people assume that because of the unique circumstances that exist between a service user and their PA, PAs don't qualify for redundancy pay. But if you no longer have a job for your PA and they have been employed by you for two years or more they are entitled to redundancy pay just like any other employee. Similarly, if your circumstances change and you no longer have a full-time job for them, and you want to employ them on a part-time basis, you are required to first offer the 'new' position to the existing PA. If they choose not to continue working under the new conditions you are still required to pay them redundancy pay.
Stakeholder Pensions
At present employers with less than five employees are not required to make stakeholder pensions available to their employees.
Statutory Holiday Pay
All employees in the UK are entitled by law to four weeks (twenty days) paid leave every year. The four weeks can include all bank holidays but not extra public holidays. This entitlement now begins from the first day of employment but cannot be taken until it has been accrued (e.g. one day's holiday after thirteen days work).
Statutory Maternity Pay
If your PA becomes pregnant and is in your employment at a specific qualifying date, then you, as employer, are required by law to pay Statutory Maternity Pay (SMP), even is she subsequently leaves your employment before her period of maternity leave commences. However, you will not be out of pocket as Enable Payroll can reclaim virtually all SMP paid from the Contributions Agency on your behalf. Please contact our office for further details and advice on SMP. We can also give advice on Statutory Paternity Pay and Statutory Adoption Pay.
Statutory Sick Pay
If your PA is unable to work through sickness, they are entitled to Statutory Sick Pay (SSP) after the first three (working) days of absence. The first three days of absence are usually paid at their standard rate of pay, but this entirely at the employer's discretion. SSP is paid as either part of or instead of the normal wage. Your PA should provide a doctor's certificate or self-certify, explaining the reason for her absence. Enable Payroll can claim part of any SSP pay back from the Revenue on your behalf.
Student Loans
If your PA has a student loan that they took out after August 1998 and if their salary exceeds £10 000 per annum (£833 per month or £192 per week) they are required to make regular repayments starting the 6 April after they leave their course. Usually the amount payable is calculated as 9% of their income over the starting limit. Once Enable Payroll has been advised by HMRC that repayments are due, we will inform you when to start making deductions from your PA's wages and by how much. The amount deducted from their salary is shown on their payslip and is paid to HMRC along with your quarterly liabilities of tax and NICs. If your PA took out their student loan before August 1998, please contact The Student Loans Company on 0800 40 50 10 or visit their website http://www.slc.co.uk
Taxable Benefits
If you provide your PA with a car for their private use, or any other benefits in kind, both you and they may be liable to pay some additional tax and NICs on these items. If you have agreed a fixed net wage with them then you should be aware that any additional liability would fall entirely on you, the employer.
Tax Credits
Since April 2003 there are two types of tax credits available, the child tax credit and the working tax credit. To qualify for the child tax credit your PA must have at least one child. To qualify for the working tax credit they must be in paid employment for at least 16 hours per week. As part of the working tax credit they may also be eligible for the childcare element, which helps towards the cost of childcare for their own children. As their employer you pay the awarded amount as part of their salary and the amount is then reclaimed by reducing your quarterly payments to HMRC. If the amount you need to pay your PA is more than your quarterly liabilities to HMRC, we will automatically apply for funding on your behalf.