Payee Tax Conditions (United Kingdom)

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N.I. Number

If it is known this must be entered. It will be printed on all reports that notify this payee's details to the HMRC. If you do not enter the N.I. Number, you are required by the HMRC to deduct tax at the 'No Declaration' rate.

N.I. Category

A new employee will have a default N.I. category of 'A - Not Contracted Out Standard Rate'. Select the category appropriate to this employee's circumstances.

Overseas Employee Paying N.I.

If this employee is currently resident overseas and still paying N.I., tick this check box.

Director Start Date

Enter the date the employee became a director, and tick the 'Director N.I.Rate' checkbox.

Director N.I. Rate

Tick this checkbox if the employee pays N.I. at the director's rate, and also enter the date the employee became a director in the 'Director Start Date'.

Treat Director As Employee

Tick this checkbox if the employee is a director but it to be treated as an employee for N.I. calculations

Tax Code

This will default to the emergency tax code. Enter the correct tax code from the employee's P45 or leave it as the emergency code if you have not received a P45.

Tax on Week 1/Month 1 Basis

Tick this checkbox if the PAYE is to be calculated on a week 1/month 1 basis rather than a year to date cumulative basis.

Tax Regime

If Scottish tax rates are implemented and the employee is resident in Scotland, select 'Scottish Standard Rates', and if the employee is not to be taxed at all, select 'No Tax', otherwise leave the default selection of 'Standard Tax Rates'.

Student Loan Deduction

Tick this checkbox if the employee has a student loan. When any pay is created for the employee a student loan repayment pay item will be added to their pay.

In Trade Dispute

Tick this checkbox if the employee is in a trade dispute. See your 'Employer's Guide to PAYE & NI' for more details on the procedures to follow in a trade dispute.

Previous Employment

Enter the information from the P45 the employee gave you. If you did not receive a P45, ensure the employee completes a P46 form, and select the statement completed by the employee. Tick the student loan checkbox if the employee crossed statement D box stating they have a student loan.