I am starting up a business and i am unsure about the PAYE system , if my employee works for someone else aswe

Question

if my employee works for someone else aswell , then which employer gives them their tax allowance ( the amount you are allowed to earn without paying tax on it. Or does the employee reclaim that from the inland revenue themselves. Please help

Answer 1

if they earn enough they will claim taxes.

Answer 2

if they pay their tax deductions with an allowance to the other company, then you stop them tax on everything they earn (no additional personal allowance).

But if they want their tax allowance from you, then it is reversed, and they pay tax on the whole earning from the other employee.

It is standard practice that he first company employing the person,deducts the full allowance, untill the tax office amend the tax code

the company forward the deduction they make from employee's, to the inland revenue on a monthly basis

althe relevant information will be provide by HMC&E
Her Majesties Customs & Excise

Answer 3

When you register as an employer you can ask for a new employers pack which will contain details of how to operate PAYE.

But to answer your question, when the employee starts to work for you he will not be able to give you a P45 as he hasn't left his other job.

You must ask him to complete a form P46 and follow the instructions on that form as to what code number to use. Assuming he fills it in correctly you will operate a code of BR which deducts tax at the basic rate (currently 22%).

Answer 4

If your employee has another job, you apply basic rate to their earnings with you. If the employee ends up overpaying tax it is up to them to seek a refund via the tax office that their first (and therefore, main job) employer is registered under. Their tax is their affair, not yours.

Answer 5

this is a problem for your Inland Revenue. stop emergency tax until you have contacted them so that you will not be made responsible for failing to deduct tax.

Answer 6

http://www.hmrc.gov.uk/employers/index.shtml