Table of Contents
1.2 Opening Balances for employees/directors
1.3 Off-payroll working (IR35)
1.1 Add an employee/director
From the Employees > View menu, click on the 'Add employee/director' button to begin filling in the details of a new employee/director.
The required fields are for the purpose of both payroll wage calculations and requirements from HMRC for Real Time Information submissions (i.e FPS and EPS).
The required fields are marked with an Asterisk and each tab will show a red asterisk until all the required fields within that tab are entered. You will not be able to save an employee/director until all the required fields are populated.
Some of the important fields are described below:
Employment details > Employment start date This is the start date of the employee. If the employee starts part way through a period, their pay will be pro rata. You will only be able to change this date by making sure to undo all their pay calculations. However, if you have already submitted an FPS to HMRC you will be unable to change this date.
1.2 Opening Balances for employees/directors
If you have run payroll on another system for the current tax year and are therefore joining Clear Books Payroll part way through the tax year, make sure to add employer opening balances on the Employer > Details > Opening balances menu. This will then allow you to add opening balances for your employees/directors depending on their employment start date.
When adding an employee/director to the system, if their employment start date is before your employer opening balance, then we will show the opening balance tab.
Fill in the details marked with an asterisk and any other fields as appropriate.
A P11 from your previous payroll system will help you fill in these details correctly
1.3 Off-payroll working (IR35)
The off-payroll working rules, commonly known as IR35, are a piece of legislation brought into place to ensure that contractors working like employees via their Personal Service Company (PSC) pay similar levels of tax and national insurance to those who are employed directly.
If an engagement between a contractor and their client is considered to fall within these rules (known as ‘deemed employment’), then the contractor is required to be treated as an employee for tax purposes only.
Understanding off-payroll working (IR35)
Clear Books Payroll will allow you to flag the employee as an off payroll worker in your full payment submissions (FPS) to HMRC.
Navigate to the Employees > View menu.
Either add a new employee or click on the name of an existing employee to edit their details.
If you are adding a new employee make sure to update all the required details in each tab of the employee form.
For the off payroll worker option, click on the ‘Employment details’ tab and tick the ‘Off payroll worker’ checkbox.
Save the employee.
There are a number of additional things to note if the employee has the off payroll worker option enabled:
- An ‘off payroll worker’ flag is submitted on full payment submission (FPS). This will inform HMRC of any employees considered to be off payroll workers.
- Statutory payments are disabled for off payroll workers.
- Pension calculations are disabled for off payroll workers.
- Employment allowance is not used against off payroll workers.