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Simpler by the year

Employers whose monthly average PAYE liability is no more than £1,500 can pay the money over once a quarter, rather than every month. That makes life simpler. The problem is that recent years have successively added to the adjustments that are made through the PAYE system, so the law has now been changed to make clear that the £1,500 a month applies to the average of PAYE tax plus construction industry scheme deductions plus primary and secondary class 1 NICs plus student loan deductions less tax credit payments less statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption pay that the employer is entitled to recover less construction industry deductions that a sub-contractor is entitled to set off against PAYE liabilities.

Is that clear? In short, if the bottom line of the PAYE payable calculation is no more than £1,500 a month, then you can pay quarterly. The new rule just shows how far the bottom line of the PAYE calculation now is from the top line.

A statutory instrument was passed earlier this year to give effect to these changes in the definition of a small employer from 6 April 2003.