CH18 - Operations of the PAYE system

Question 1

When FPS & EPS needs to be reported electronically?

Answer 1

FPS - on or before the date of payment
EPS - 14 days of the end of the tax month*

*being 19th of a calendar month when there are no payments made to employees in a month

Question 2

When is PAYE Due?

Answer 2

• 17 days after end of the tax month (22nd of the month) for electronical payments made
• 14 days after the end of the month (19th of the month) for non-electr. pmts

Question 3

When PAYE can be paid quarterly?

Answer 3

When the total tax and NIC’s due is less than £1,500 per month on average

(SI 2003/2682, Regs 69 and 70)

Question 4

When employer needs to make payments of PAYE electronically?

Answer 4

When a large employer employs 250 employees or more.

Question 5

What is the due date of P60 & P11d
and its purpose?

Answer 5

P60
due by 31/May of end of tax year to employee
- shows total pay + taxable benefits included in payroll and deductions

P11d
due by 6/July following end of tax year to employee & HMRC
- shows taxable benefits not included in payroll

Question 6

By when benefits included in payroll must be provided and to whom?

Answer 6

by 31/05 following the end of the tax year
- employer must provide the employee with a description of the benefits and the cash equivalent of each beneift

Question 7

A ‘readily convertible asset’ is:

Answer 7

• i. an asset capable of being sold or otherwise realised on a recognised investment exchange or on any market specified in the PAYE Regulations; or
• ii. an asset for which ‘trading arrangements’ are in existence or for which trading arrangements are likely to come in to existence.

Question 8

Assets which would be treated as ‘readily convertible’ are:

Answer 8

• quoted shares or unit trusts;
• gold bullion.