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PAYE and Work Place Pension

PAYE and Workplace Pension Overview

PAYE (Pay As You Earn) and Workplace Pension are two critical components of employment in the UK. PAYE is a tax system that ensures employees’ income tax and National Insurance contributions are deducted from their salaries before they receive them. On the other hand, Workplace Pension refers to the mandatory pension scheme where eligible employees are automatically enrolled by their employers, encouraging retirement savings. 

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PAYE and Work Place Pension

Understanding UK PAYE and Pension Regulations

PAYE, or Pay As You Earn, is the system used in the UK to collect income tax and National Insurance contributions from employees’ salaries. Employers are responsible for deducting the correct amount of tax and National Insurance before paying employees. This ensures that individuals meet their tax obligations throughout the tax year.

Workplace Pension, on the other hand, is designed to help individuals save for their retirement. Employers are required to automatically enrol eligible employees into a pension scheme and contribute to their pensions. Employees can also make contributions, and the government provides tax relief on these contributions.

For employers, managing PAYE and Workplace Pension compliance can be complex due to various rules, thresholds, and regulations. It’s crucial to accurately calculate and deduct taxes, maintain proper records, and meet pension auto-enrolment requirements. Failure to comply with these regulations can result in financial penalties and legal consequences. That’s where HHM Chartered Accountants can assist. 

We offer expert services to help businesses handle PAYE calculations, payroll processing, and Workplace Pension auto-enrolment. Our solutions ensure compliance with HMRC regulations, accurate record-keeping, and streamlined pension administration.

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HHM provides comprehensive support for PAYE registration, including initial assessments, application support, and compliance checks. We ensure businesses meet all requirements and avoid penalties.

Yes, HHM offers services for accurate PAYE calculations, employee data management, and timely payroll submissions. We streamline the process and ensure compliance.

Workplace Pension Auto-Enrollment mandates employers to enroll eligible employees into pension schemes. HHM helps businesses with assessment, scheme selection, and compliance.

HHM offers regulatory updates, audit preparation, documentation management, reporting, and compliance consultation to ensure businesses meet legal obligations and avoid penalties.

HHM provides customised pricing packages based on business size and needs. For accurate quotes and details, please contact us for a personalised consultation.

If your employees receive monthly payments, you must report and remit their income tax and NIC deductions to HMRC by the actual payment date, typically the final working day of the month. For weekly payrolls, the reporting to HMRC is due weekly, by the Friday following the week’s end date.

For quarterly payrolls, the deadlines are as follows:

July 5th for payments made between April 6th and July 5th.

October 5th for payments made between July 6th and October 5th.

January 5th for payments made between October 6th and January 5th.

April 5th for payments made between January 6th and April 5th.

You can submit payroll information using payroll software or HMRC’s free Basic PAYE Tools. If you have any doubts, consult an  accountant for guidance.

Several common tax-free employee benefits and eligible expenses encompass:

Pension contributions – as long as they remain within annual and lifetime allowance limits.

Childcare vouchers – offering up to £55 weekly, tax-free.

Cycle to work scheme – providing a 25-39% savings on a new bike and related accessories.

Trivial benefits such as small gifts, parties, or flowers – with a tax-free cap of £50 per gift.

Mileage allowance – allowing 45p per mile for the first 10,000 miles.

Many of these benefits have specific regulations governing the tax-free amount that can be provided. For more information on allowable expenses and benefit thresholds, consult your accountant or HMRC.

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