When you run your own business, you will eventually get to the stage where you become an employer, where the wages of your staff is completely in your hands. Not only are you responsible for your employees being paid, you also have to make sure that all the necessary taxes are being paid to HMRC.
All employers in the UK are legally obligated to operate the PAYE system when paying their staff. The PAYE (Pay As You Earn) system is HMRC’s method of collecting Income Tax and National Insurance Contributions from employees earning over £7,475 a year. For someone who has just started their own business, or has recently entered an administrative position, this system can be extremely complicated. Taking PAYE courses can be extremely beneficial for these people.
In order to comply with the PAYE regulations, business should set up a payroll system. Although this is detailed on a payroll course, in reality it can be extremely complicated. You will be required to use payroll software that has been approved by HMRC, along with all the records of your wages. Your PAYE training will teach you how you can then accurately calculate Income Tax and National Insurance contributions.
If your company doesn’t make and keep accurate records of PAYE, it could face a penalty of up to £3000. It may also be difficult for you to start another business in the future. Training in PAYE is essential to make sure you are always complying with the regulations.