HMRC PAYE registration

PAYE (Pay As You Earn) is the system that HM Revenue & Customs (HMRC) uses to collect Income Tax and National Insurance contributions (NICs) from employees (including directors of limited companies). The tax and NICs is deducted throughout the tax year based on the employees' earnings and then paid to HMRC.

You must deduct tax and NICs from employees' pay each pay period and pay your employer's Class 1 NICs if they earn above a certain threshold. Your payroll software should do this. You will pay these amounts to HMRC monthly or quarterly.

You must submit a Full Payment Submission (FPS) online, on or before each payday, to tell HMRC about payments made to all your employees and confirm the tax, NICs and other deductions. Again, your software should do this each time you run the payroll to calculate PAYE. You will need to do this regardless of the amount you've paid them or how long they've been working for you.

You must pay the correct amount, based on your FPS submission on time. If you don't you may have to pay interest or penalties.