Many trusts are now adopting the single PAYE reference, commonly known as PAYE pooling, however before jumping in it’s important to look at all the pros and cons involved!

Many trusts are now adopting the single PAYE reference, commonly known as PAYE pooling, however before jumping in it’s important to look at all the pros and cons involved!

Firstly let’s have a look at what PAYE pooling actually is; previously all individual schools within a trust would have had their own PAYE reference. So if you had 13 schools in your trust that’s 13 PAYE returns and payments to process, which is pretty intense! PAYE pooling would allow the Trust to have a single PAYE reference which means one single return and payment. Simple! But is it really that simple? Let’s see…

Pros

• The trust as a whole will only have to make one single return and Payment, this will save many headaches and hair tearing!

• In the long run it will save you time and money on admin expenses.

• Employees moving between schools in the same trust will no longer have the need for P45 and P46 forms, which in turn will reduce the risk of receiving the dreaded 0T tax code.

• Implementing the change in April will mean there will be no messy year to date figures to deal with.

Cons  

• Closing down your old PAYE reference will result in all of your employees receiving a P45 which can be confusing.

• Initially there will be extra admin time and costs to ensure the successful set up of the new PAYE reference.

• When errors occur it will be more difficult to locate where the error has originated from as you are now looking at a number of schools rather than just one.

 

And finally the big one….

 

• All schools in the trust will be jointly and severally liable for all debts, which means if one school is experiencing financial difficulties then you all bear the burden.

In summary the age old saying of no pain no gain seems very apt, if you can endure the extra costs and hassle at the beginning you will reap the rewards later on! And remember it will always be beneficial to talk to your payroll provider before making any hasty decisions.

If you have any questions on making this change, please don’t hesitate to contact us on 03331 128000.