PAYE new employees pay, P45, tax national insurance number missing

A new employer needs to register with HMRC as an employer and operate a PAYE scheme and make important checks on each new employee recruited and complete the initial paperwork to set up the employees pay records of tax national insurance and personal details and inform HMRC the employee has started.

Initial P45 checks for PAYE and new employee pay status

Taking on a new employee is a relatively simple process but if errors are made they can be costly. Most of the initial information required to set up the PAYE records are contained in the P45 tax form the employee should present to a new employer. If a P45 form is not available then the employee should be given a P46 and asked to complete it.

Important checks include determining the new employee tax status as an employee rather than self employed. Always adopt an approach of employee unless the new recruit specifically provides services only and there is an agreement stating those services and none of the rules that could indicate potential employee status are present.There are numerous rules that destroy the self employed status such as using business tools rather than own, taking a company vehicle home at night, working for one employer and many others. If anyone self employed is later determined to be an employee the money paid to them, the employees pay, would be regarded as net wages not gross with the employer responsible for the income tax national insurance contributions employees and employers which had not been deducted, interest and penalties too..

One important payroll check if there is a gap in the paperwork is to make certain the new recruit can be legally employed. If there are any doubts, missing information such as previous work history or lack of a apply for national insurance number then contact the job centre to determine the employment status.

If the new employee is from outside the UK, it is the employer responsibility to ensure that they are entitled to work before they start working for you. The government has recently introduced checks employers must make on all new employees as a safeguard from employing someone illegally.

National Insurance Contributions and National Insurance Card Taxes

National insurance contributions are paid by all employees over the age of 16 whose gross income exceeds the national insurance threshold and forms part of the taxes collected by the inland revenue. Employers also pay additional NI contributions. In years gone by there was not a record of being registered for taxes and national insurance but an actual national insurance card upon which were affixed stamps each week.

National Insurance Card – Providing Social Security Benefit

A NI Card is provided at the age of sixteen when we begin paying insurance independently of our parents or guardians. Employees under the lower age limit of 16 are exempt from national insurance contributions. It is a card which symbolises the system of taxes and social security benefits in U.K contains your unique NI number used to pay your NI contributions through, as long as you are resident in the UK. It was developed and is still controlled by the Inland Revenue and HM Revenue and Customs to provide the government, as well as consumers easy ways of paying taxes and is something that can be a similar technique to help you in business should you wish to start one. It was introduced keeping in mind the national insurance act of 1908 during the time of government expansion.