Title: Payroll Seminar How to register; RTI (Real Time Information); Record keeping and reporting requirements; Mistakes to avoid; Penalty regime; CIS refunds. Summary: In this seminar you will learn the basic skills to enable you to deal with the payroll and CIS yourself. It will also enhance your understanding of the RTI (Real Time Information) initiative and the penalty regime. Case studies will be completed in groups for better understanding of the practical application of the knowledge learned. To be delivered by: Zee Shan Bawany – Regional Tax Adviser – Smartfield Accountants

1. Payroll & CIS
Presenter: Mr Zee Shan

2. Content:
1. Intro to presenter
2. PAYE
3. Online Registration Process
4. Mistakes to avoid
5. CIS
6. RTI
7. Help & Advice
Presenter: Mr Zee Shan

3. Introduction of the
Presenter

4. Zee Shan Bawany CTA ACCA MAAT
Tax Manager
Smartfield Accountants

5. Education
Qualification Centre
CTA (Chartered Tax Adviser) BPP Birmingham
ACCA (Association of Chartered Certified Accountants) De Montfort Uni
ATT (Association of Tax Technicians) FTC Birmingham
C & G 7407 Teacher Training Leicester College
AAT (Association of Accounting Technicians) Leicester College
BTEC National Diploma in Computing Leicester College

6. Smartfield Limited Tax Manager
Abbey Tax Plc Tax Consultant
Smith Hannah Ltd Head of Personal Tax
Leicester College Tax Lecturer
Employment

7. Hobbies

8. Hobbies

9. PAYE
System

10. Who needs to register PAYE Scheme?
Anyone who employs staff. It includes:
- Self Employed Individuals
- Ltd Co
- Partnerships
- Trust

11. Who does NOT need to register for a PAYE Scheme?
Anyone who employs staff. But:
- pays them below the National Insurance
Lower Earnings Limit (2014: £109 p/wk)
- all employees do not have another job
- none of the employees are receiving a state,
company or private pension
- no employee benefits are provided
http://hmrc.gov.uk/paye/intro/register.htm#1
http://www.hmrc.gov.uk/manuals/pommanual/PAYE20135.htm

12. Types of
PAYE Schemes

13. Types Of PAYE Schemes
-Normal PAYE Scheme
-Tronc Scheme
-Direct Payment Scheme (DOME)
http://www.hmrc.gov.uk/manuals/dmbmanual/dmbm520020.htm

14. Normal PAYE Scheme
3 Payment Options
-Monthly Payment
-Quarterly Payment
-Annual Payment

15. Payment
Options of
Normal
PAYE Scheme

16. Normal PAYE Scheme:
Monthly Payment
Pay by 19th of the following month.
If paying electronically then pay by
22nd

17. Normal PAYE Scheme:
Quarterly Payment
If the combined National Insurance
contributions and PAYE payments for
your employees and sub-contractors
averages less than £1,500 a month,
then Quarterly Payment Scheme can
be setup.

18. Normal PAYE Scheme:
Yearly Payment
If all payments on which tax and NICs are
due are paid to your employees annually
in a single tax month, you can ask HMRC
to be treated as an 'annual payer'. You
must use the same month every year, so if
this changes or you start paying your
employees more frequently, you will need
to tell HMRC.

19. Where to send payments
HM Revenue & Customs
Bradford
BD98 1YY

20. Online payments
https://www.santanderbillpayme
nt.co.uk/hmrc/scripts/nrpayform.
asp?pt=PAYE

21. Nil Online Payments
http://www.hmrc.gov.uk/tools/pa
yinghmrc/no-monthly-
payment.htm
Upto 30 April 2014 only

22. Nil Payments Notice
Call HMRC's Payment Helpline
on Tel 0300 200 3401

23. Registering
PAYE Scheme

24. Registering PAYE Scheme
Options:
1. Call 0300 200 3211
2. Online at:
http://www.hmrc.gov.uk/paye/intro/register-email.htm

28. The Employment Allowance is available
from 6 April 2014. If you are eligible you
can reduce your employer Class 1 NICs
by up to £2,000 each tax year.
https://www.gov.uk/employment-allowance-up-to-2000-off-your-class-1-nics
£2,000 Discount!

29. Operating
PAYE Scheme

30. Monthly
Vs
Weekly

31. Joiners: P46 or P45
Leavers: P45

32. Reports:
Wage slips
Gross & Net Pay
FPS And EPS

33. Yearly Forms:
P60
FPS
EPS

34. R T I
Real Time Information

35. R T I
HMRC Guide
http://www.hmrc.gov.uk/payerti/

37. Data Required

38. Why?
To let HMRC know who were paid and how much.
When?
By 19th of month following deduction even if paying
by 22nd, replacements can be sent
How?
Basic PAYE Tool or 3rd Party Software.
Full Payment Submission (FPS)

39. Why? To reclaim statutory payment compensation YTD or CIS suffered
When? By 19th of month following deduction even if paying by 22nd,
replacements can be sent
How? Basic PAYE Tool or 3rd Party Software.
What else?
– To submit nil return or period of inactivity
– Even 1/4ly or annual payers must do monthly EPS saying ‘nil payment’?
– To submit return for year
Employer Payment Summary (EPS)

40. Extra details needed on Final EPS:
- Ceased Indicator
- Date scheme ceased
- Final Submission for Year
- Free of Tax Payments to employees
- Expenses and Benefits paid to employees
- Employees Out of UK
- Employees Pay to Third Party
- Forms P11D and P11D(b) are due?
- Service Company
http://www.hmrc.gov.uk/payerti/reporting/what-to-report.htm#9
Employer Payment Summary (EPS)

41. Will start from 6 October 2014
http://www.hmrc.gov.uk/payerti/reporting/late-reporting.htm#3
Penalties under RTI

42. Submission deadlines
Final EPS : 19 April
EYU (Earlier Year Update): 19 May
P60 to employees : 31 May

43. Penalty for late submission of
Final EPS
£100 per 50 employees for each month or
part month you delay filing your return
after 19 May.
http://www.hmrc.gov.uk/paye/problems-inspections/annual-return-late.htm

45. Group Exercise
Complete P60

46. Case Study
Payroll Manager

47. Common Mistakes
Group discussion

48. Solution to Avoid Common Mistakes
1. PAYE Office Reference Number used in place of PAYE Reference
Number;
2. P14 form template used instead of P60 to hand out to employees;
3. Hand out the correct P60 to the correct employee. Mistakes
happen when two employees have the same initial and surname;
4. Enter the correct National Insurance Numbers for all the
employees, otherwise the State Pension benefit will not accrue;
5. Ask the employee to confirm his/her current address, to ensure
the address on the P60 is correct. If P60 is to be posted out to the
employee then it will reach the correct address.

49. Tax Table
Tax Year
12/13
£
Tax Year
13/14
£
Income Tax
Tax free income
Personal allowance 8,105 9,440
Rate
Basic rate: 20% 0 – 34,370 0 – 32,010
Higher rate: 40% 34,371 – 150,000 32,010 – 150,000
Additional rate: 45%(50%) Over 150,000 Over 150,000
http://www.hmrc.gov.uk/rates/it.htm

50. http://www.hmrc.gov.uk/rates/nic.htm
http://www.hmrc.gov.uk/paye/rates-thresholds.htm
National Insurance Rates
£ per week 2011-12 2012-13 2013-14
Lower earnings limit, primary Class 1 £102 £107 £109
Upper earnings limit, primary Class 1 £817 £817 £797
Primary threshold £139 £146 £149
Secondary threshold £136 £144 £148
Employees' primary Class 1 rate between
primary threshold and upper earnings limit
12% 12% 12%
Employees' primary Class 1 rate above upper
earnings limit
2% 2% 2%
Class 1A rate on employer provided benefits
(1)
13.8% 13.8% 13.8%
Employers' secondary Class 1 rate above
secondary threshold
13.8% 13.8% 13.8%

53. Construction Industry Scheme

54. Registration:
Who
What
How

55. Registration: Who
Who needs to register?
Contractors and Sub-Contractors

56. Registration: What
What work is within CIS?
Construction;
Refurbishment;
Decoration.
http://www.hmrc.gov.uk/cis/intro/decide-if-cis.htm

57. Registration: How
How to register for CIS?
Contractors & Sub-Contractors:
CIS Helpline on Tel 0300 200 3210

58. Operating
CIS

59. Responsibilities if you are a CIS contractor
If you work as a CIS contractor you need to:
- register for CIS with HMRC
- check the payment status of your subcontractors before you pay
them
- tell HMRC each month how much you have paid your
subcontractors
- pay HMRC the deductions that you have taken from your
subcontractors' payments
- give the correct paperwork to both HMRC and your subcontractors
http://www.hmrc.gov.uk/cis/contractors/reg-obs.htm

60. Verification of Sub-Contractors
Call CIS Helpline on
0300 200 3210
Monday to Friday, 8am to 8pm
Saturday, 8am to 4pm

61. Apply deduction:
30% Unregistered
20% Registered
0% Gross Pymt Status

62. Apply deduction on what:
Labour cost only
Not on materials cost

63. Deductions table:
Gross
Income
Material
Cost
Labour
Cost
CIS
Deduction
Net
Income

64. CIS Payment:
Monthly through PAYE
system

65. CIS Refund Claim:
Through PAYE or
SA100 Personal Tax Return
Not through CT600 Company’s Tax Return

66. CIS Gross Payment Status
Applying to be paid gross under CIS
Before HMRC can grant you gross payment status
so you can get paid with no deductions, you'll
need to show them that your business passes
three tests:
business test: CIS work & Bank Account
turnover test: £30,000 per person or £200,000
compliance test: Up to date
http://www.hmrc.gov.uk/cis/subcontractors/advice-pay.htm

67. Example of
CIS300
Monthly
Return

77. Deadline Date

78. Deadline Date
for monthly CIS 300 Return
19th of every month

79. £100 per month
Penalties for late filing
of monthly CIS Return

80. Summary
- PAYE
- CIS
- RTI

81. Group Discussion
3 Problems that you face
when operating the payroll
and how you overcome
them.

82. Please put your email address
on the list
Please do not send me e-mail after the event to request copies
because I do many of these event and it is hard to deal with
individual requests after the event.
Copy of slides

83. HMRC Employer Helpline
0300 200 3211
CIS Helpline 0300 200 3210
Help & Advice

84. The End