Registering for PAYE

Registering for the PAYE Scheme

In order to receive salaried income from your business you need to register the limited company with HM Revenue and Customs for the Pay as You Earn (PAYE) scheme. To do this you should call the HM Revenue and Customs New Employers Helpline as soon as possible on 0845 60 70 143 and provide details about the business. Once registered a ‘New Employers Pack’ will be sent out to the companies registered address.

PAYE Reference Notification

The ‘New Employers Pack’ contains a letter that details the Employers PAYE Reference and Accounts Office Reference. You need these references when making payments to the HMRC. You’re also required to quote the Employers PAYE reference whenever you deal with HM Revenue and Customs.

The letter also shows the address of the HM Revenue and Customs office that holds your company records. You should deal with this office whenever you send in PAYE documents such as a P45 or P35.

Letting the HMRC know that you are an employee of the company

Once the company is registered with the HM Revenue and Customs for PAYE you need to let them know that you will be employed by the limited company. To do this you will either need to send them a P45 or P46.

If you previously left employment with another company in the tax year the employer should have provided you with a P45 detailing all Income received and tax deducted in the year to date. If you have a P45 you will need to complete the relevant section with your new employer details (your Limited Company) and send it to your HMRC office.

If you don’t have a P45 you need to complete a P46. Form P46 is used to let the HM Revenue and Customs know that you’re employed by the new employer. It’s only completed where a P45 is unavailable. Two form P46s are included in the New Employers Pack.

Once you’ve registered with the HMRC for PAYE and let them know that you will be employed by the company you can start to deduct Income Tax and Class 1 National Insurance from Salaried Income.

Arranging Quarterly PAYE Payments

As a limited company contractor you will normally be the sole director and employee of the company, therefore total monthly PAYE deductions are likely to be less than £1,500 per month. The HM Revenue and Customs allows companies who have total monthly PAYE deductions of less than £1,500 to make payment on a quarterly basis. This can help with cash flow and reduced limited company administration. If you wish to arrange monthly payments you should contact your HMRC office.

To find out more about going into business with a Limited Company call Commonwealth Contractors now on 0800 294 4388 or submit your details and we will get right back to you

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