Another outsourced query!

[Debbie25]

Hi there

Our company have recently taken on another company who employee around 15 members of staff.

We currently run our payroll through an outsourced company every month.

My manager wants us to use this same outsourced company to pay the new 15 staff, however doesn't want them on our company's payroll PAYE. In other words keep their PAYE ref the same as it has been before.

How would this work in terms of paying them? Would we have to set up a new payroll with our outsourced payroll company, and although processing it at the same time as ours, keep them completely separate?

Eventually we are hoping to transfer the new company's staff to our terms and condidtions; so I'm assuming we would then make them leavers on their payroll and make them starters on ours.

Help please!!!

Many thanks

Debbie
London

[Rob Hey]

Hi again,

Most payroll software packages can cope with more than one payroll and more than one PAYE authority (reference). In fact, your payroll provider is already likely to be using this functionality because they more than likely have more than one customer.

As for using the same PAYE reference, I'm not so sure you can keep the same reference as this was allocated by HMRC to the company yours took over. However, as I said, I am unsure on this and only HMRC can really tell you. In my experience, even if the payrolls of taken-over companies have often been kept separate, HMRC have insisted upon a change of PAYE reference - usually in order to consolidate both 'companies' to a single tax office.

As for other aspects of transferring employees, I'll defer to wiser heads than mine when it comes to the intricacies of TUPE.

[Debbie25]

Thanks Rob, you have been very helpful! I will call HMRC to see what they advise.

Many thanks

[Ian Congreave]

With regard to the whole issue of bringing in employees under TUPE, you may find our recent discussion on this at viewtopic.php?f=58&t=1880 helpful.

[cher01]

Hi, a similar situation happended with the company I work for, and we did keep the other company's PAYE reference, i.e kept a separate payroll running until the point of transferring them onto our own payroll/paye ref., we actually kept it running separately to our own payrolls for at least a year.

I would reckon your Accountants should keep your right on this as I imagine this will all tie in with your audited accounts, just speaking from past experience with the company I work for.

so basically yes you could tell your outsource co. to run the other company payroll under their existing paye ref, separate to your own, until you move them onto your own. my best advise when to move them to your own payroll would be at the start of the new tax year, though that might not suit your situation?

all the best
cher

[Debbie25]

Thanks guys for this info, sorry for the late reply, just seen this.

That does sound exactly what my boss wants us to do; keep them separate until start of next tax year and then transfer them to our PAYE ref.

Thanks again for all the helpful advice

[Debbie25]

Hey guys,

Just un update, thought some of you would be interested inthe response I had from HMRC.

When asking them whether we could run the new company through our outsoucred company under their PAYE ref, HMRC said we could only do this if we registered with the Employment Office to register taking on another business. We would then be responsible for carrying out all year end processes. I didn't realise you would need to do this, thought you could just transfer them to the new payroll provider and we'd deal with everything else.

However, if the new company's name no longer exists then we'd have to make them leavers and get P45's etc, and make them starters under our company and PAYE ref.

Very confusing!

Thanks