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Low paid staff - filing requirements

I want to take on my first member of staff for 16 hours a week and I’ll pay her the minimum wage for now. What requirements do I have for the collection of tax and national insurance etc, and what do I need to file with HMRC?

Unless employees provide you with a P45 from a previous employment, you should always get them to complete HMRC form P46. However, assuming she indicates this is her only job since 6 April on the P46 (box A), you needn’t submit this to HMRC because she will be earning below the Lower Earnings Level (LEL), which for 2011/12 is £102 per week. You can simply file it away until her earnings exceed this level.

Again on the assumption that she ticked box A, you will not need to calculate any tax or national insurance because her earnings do not exceed either of the thresholds. So unless her earnings exceed the LEL, you can simply pay her gross pay.

You will not need to complete the annual forms P14, P60 or P35 either because her earnings were below the LEL. So you have no requirements to file anything with HMRC or provide anything to your employee.

On a practical note though, it sounds like your employee may be claiming tax credits and therefore, she may want you to fill out a P60 for her so that she has evidence of her earnings.

If you would like any further assistance with this or any other matter, please feel free to contact your local TaxAssist Accountant. 

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