Chapter 3 - Income from employment

Question 1

What are the three requirements to a company must comply with to satisfy ‘real time information’

Answer 1

1) Employers must submit income tax and NIC information to HMRC electronically when or before employees are paid each week or month
2) A year end summary of all the tax and NICs deducted must be provided with the final RTI submission for the tax year
3) Penalties are charged on a monthyl basis if RTI submission are late

Question 2

What are 2 codes used in the PAYE system?

Answer 2

1) The letter L shows that employee is entitled to basic personal allowance
2) The letter K shows that allowances are less than benefits - increasing taxable pay

Question 3

When does the P60 form get given to employee and what does it contain?

Answer 3

To employee by 31 May
Contains:
TTP
Total Tax deducted
PAYE Code
National insurance number
Employers name and address

Question 4

Who is the P11D given to and what does it contain?

Answer 4

To Employee and HMRC by 6 July
Contains:
Cash equivalants of all benefits

Question 5

Who is a P45 given to and what does it contain?

Answer 5

Given to employee on leaving
Contains:
PAYE Code
Income paid and tax deducted from start of tax year to date of leaving