If you are joining an Academy or a schools trust from April, the prospect of potentially changing the PAYE scheme you can turn into a real headache. Is it always a good idea to change PAYE reference at this time of year?
If you are considering this yourself you need to be aware of both the advantages and the disadvantages of doing so.
So what are the advantages?
• No year to dates – All employees will move over to the new PAYE scheme with no year to dates to move across with them. This can simplify the process as there is less information to transfer payroll data.
If you are joining an Academy or a schools trust from April, the prospect of potentially changing the PAYE scheme you can turn into a real headache. Is it always a good idea to change PAYE reference at this time of year?
If you are considering this yourself you need to be aware of both the advantages and the disadvantages of doing so.
So what are the advantages?
• No year to dates – All employees will move over to the new PAYE scheme with no year to dates to move across with them. This can simplify the process as there is less information to transfer payroll data.
• Leavers will be removed – As leavers do not need to be pulled through into the new tax year, you will not have to sort live employees from leavers when changing scheme.
• In line with other changes – The changes my fall at the time which a school becomes an academy or joins a trust, this would ensure all changes are happening at the correct and most appropriate time.
Of course, with any huge decision such as this there are also disadvantages which include
• No P60 for the employee – As all employees will technically be new starters in HMRC’s eyes from April they need to be made a leaver at the end of March which will produce a P45 and mean that a P60 should not be produced.
• Employee receives a P45 – This may not go down well with an employee, as they may not be confident the document will satisfy the bank with any applications. There are possible ways to avoid giving employees a P45 and still produce a P60 which your payroll provider will be able to advise you on.
Please ask us for more details.
• Other schools/ organisations changing payroll providers – It is worth considering when other organisations will be changing payroll provider or moving to a new PAYE scheme, this will create peaks in the payroll outsourcing worlds workloads and you may want to consider moving in a quiet part of the year.
This is quite a lot of information to take in, so please weight up all the pros and cons before changing the PAYE scheme in April.
It is always best to seek advice from your current or potential new payroll provider to ensure you are following the process that is best for your school and say goodbye to those migraines! If you need further information on payroll transfers or PAYE schemes please contact us on 03331 128000.