How do I close my PAYE scheme?

Intro

As an employer, there may come a time when you need to close your PAYE (Pay As You Earn) scheme. This could be due to various reasons such as temporarily stopping employment, mergers, or successions. In this article, we will guide you through the necessary steps to close your PAYE scheme and ensure a smooth transition.

Why Close a PAYE Scheme?

Before we dive into the process, it's essential to understand why you might need to close your PAYE scheme. Some common reasons include:

• Temporarily stopping employment
• Mergers and successions
• Period of inactivity

Step 1: Submit a Final Payroll Return

To close your PAYE scheme, you need to submit a final payroll return to HMRC (Her Majesty's Revenue and Customs). This return should include all the necessary details, including:

• Full Payment Submission (FPS)
• Employer Payment Summary (EPS)
• P45 for each employee

Step 2: Report Irregular Payment Patterns

If you have an irregular payment pattern indicator, you need to report this to HMRC. This indicator is used to notify HMRC of any changes to your payment pattern.

Step 3: Notify HMRC of No Payments Due

Once you've submitted your final payroll return, you need to notify HMRC that there are no payments due. This will ensure that you're not required to make any further payments.

Mergers and Successions: What You Need to Know

If you're undergoing a merger or succession, you may need to move employees from one payroll to another. Here are some key points to consider:

• Contact HMRC Employer helpline for guidance on payroll changes
• Submit P11D forms for company benefits, depending on the type of change
• Use pay and tax details from the old employer reference when creating a new payroll
• Deduct outstanding tax from employee payments after they move payrolls
• Submit FPS under a new employer reference

Reopening a PAYE Scheme

If you need to reopen your PAYE scheme in the future, you can do so by contacting HMRC. They will guide you through the process and ensure that your scheme is reinstated correctly.

Conclusion

Closing a PAYE scheme can seem like a daunting task, but by following these steps, you can ensure a smooth transition. Remember to submit a final payroll return, report irregular payment patterns, and notify HMRC of no payments due. If you're undergoing a merger or succession, be sure to follow the necessary guidelines to move employees from one payroll to another. If you have any questions or concerns, don't hesitate to contact HMRC for guidance and support.