Pay as you earn is the system that HMRC uses to collect income tax and national insurance contributions from employees as it is earned. Choosing how to run your payroll to ensure PAYE is operated correctly will be an important decision for your club.
As payroll rules are quite complex, and as nearly all employers are required to file payroll returns online, most payrolls are now run through payroll software programmes.
You could either:
- Run in-house using commercial computer software
- Run in-house using free HMRC software (fewer than 10 employees)
- Outsource your payroll to a payroll bureau/accountancy firm
If you would like more guidance about payroll and software, HMRC has lots of information.
When you register the PAYE scheme with HMRC (which can be done online), you will be given a unique Employers Tax reference number together with a New Employer Pack containing help and guidance.
Can I pay someone as Self Employed and not deduct tax?
One of the most important things to consider is whether an individual is employed or self-employed. This is an area which clubs can often get wrong, especially when they pay coaches, casual workers and honorariums. It is usually the responsibility of the employer to get this right so, if in doubt, seek professional guidance or contact HMRC.