Employers – Frequently Asked Questions
General
- What does it mean when a code number says week 1 or month 1?
- I took on a worker who says he is self employed. Does that mean I don't deduct tax and NICs?
- When do I have to start deducting NICs from my employees wages?
- My new employee only gave me part 1A of the form P45. It has pay, tax, week number and a tax code on it. Can I use this?
- Do I need a medical certificate before paying SSP?
- My accountant/agent completes and files my return why have you charged me penalties?
Q. What does it mean when a code number
says week 1 or month 1?
A. When a code is operated on a week1/month1 basis this means that you use week 1/month 1 of the Tax Tables on each weekly or monthly pay day. This basis is non-cumulative, which means you don't add the pay and tax to the previous weeks, or months figures of pay and tax.
Q. I took on a worker who says he is self employed. Does that mean I don't deduct tax and NICs?
A. As you are paying the wages you must decide whether the worker is employed or self employed. Obtain a copy of leaflet IR56 which will help you decide. If you are unable to decide contact the Employment Status Inspector at your PAYE office for guidance. If you decide that the worker is self employed he is responsible for his own tax and NICs and you should not deduct them from the payment. If you decide that he is an employee, deduct tax and NI in the normal way.
Q. When do I have to start deducting NICs from my employees wages?
A. NICs should be deducted from an employee's wages providing
- they are over age 16;
- they are under state retirement pension age and;
- their earnings are above the weekly, or equivalent, Earnings Threshold (ET).
Q. My new employee only gave me part 1A of the form P45. It has pay, tax, week number and a tax code on it. Can I use this?
A. No, an employer needs parts 2 and 3 of a P45. Give your employee part1A back and ask for parts 2 and 3. If your employee is unable to provide these you must use the form P46.
Q. Do I need a medical certificate before paying SSP?
A. Employers do not require medical evidence before paying SSP. If an employee satisfies all the conditions to receive SSP and the employer has no reason to doubt the incapacity, SSP can be paid without medical evidence.
Q. My accountant/agent completes and files my return why have you charged me penalties?
A. Section 98A TMA 1970 allows us to charge penalties, and
these are directed to the person who's responsible for completion of the End
of Year returns. As shown in Regulation 43(1) Income Tax Employments Regulations
1993 this is the employer's responsibility.
