If an employer has a PAYE scheme in place, but has no employees to pay, they still need to make submissions to HMRC each pay period. If no submissions are made, the employer may incur a penalty, or have estimated values due in their HMRC account.
If there are no employees to pay for a single pay period, you may choose to run a ‘nil’ period, however if you know that the company will not be paying anyone for more than one tax month, you can report a ‘Period of inactivity’ to HMRC. Once submitted, HMRC will not expect to receive any submissions between the start and end date of that period.
If the company does end up paying employees during the period submitted to HMRC as inactive, you can simply submit a normal payroll, and this will override the ‘Period of inactivity’ record at HMRC. To report a Period of inactivity from Paycircle, watch the video or follow the steps below.
Report a period of inactivity
Click Settings then click Payroll settings.
In the Payroll settings panel, click Report period of inactivity link
Switch the toggle on, and select the end date of the Period of inactivity.
Once confirmed, Paycircle will send an EPS to HMRC to report the inactivity.
Reopen an inactive period
If, once the Period of inactivity has been submitted to HMRC, there are employees to pay, you can reopen the payroll. To do this, follow the steps below.
Click Payroll then click History.
Click the action cog ⚙️ next to the period you wish to reopen from, and select Reopen period.
This will reopen the period you have selected, as well as any subsequent periods within the Period of inactivity.
Once you have reopened the period, you can run payroll as normal from the current period area within payroll. If you reopen periods in error, and need to resubmit the Period of inactivity, you will need to reopen all the inactive periods, and submit a new Period of inactivity from the Company settings.