Scenarios

Karishma Updated by Karishma

The following scenarios may help you decide how best to approach the year-end procedure: 

  1. You have a single company to process: 
    1.  It is not part of the split company, and the pay is not expected to increase – Yes to both questions, Payroll will determine statuses correctly.
    2. Not part of a split company, but the pay is expected to increase from below £3million to above -
      1. Company was a small employer – No to both questions and update both company fields manually
      2. Company was not a small employer – Yes to small employer and Payroll will set the status to ‘N’, but No to apprentice levy, update this company field manually. 
    3. It is a part of a split company, 2023/24 pay recorded in Payroll for your part of the company exceeded £3million – Yes to both questions. Payroll sets ‘N’ for small employer and ‘Y’ for apprentice levy. 
    4. It is part of a split company and NIC liability recorded in Payroll is less than small employer threshold – either: 
      1. No to both questions and update both company fields manually once the whole company group has been considered 
      2. If you know the whole group is small employer (and remember apprentice levy is across all ‘connected companies’ and not just the same PAYE scheme) you can answer Yes to both questions and Payroll will set ‘Y’ for small employer and ‘N’ for apprentice levy. 
    5. It is still part of a split company, NICs in Payroll exceed small employer limit but gross pay is less than £3 million –  
      1. Yes for small employer and Payroll will set the status to ‘N’ 
      2. Only choose Yes for apprentice levy if total pay across all connected companies is under £3 million and not expected to increase above threshold. Payroll will set status to ‘N’. 
      3. Otherwise you must choose No for apprentice levy and set ‘Paying apprentice levy’ to true manually. 
  2. You have a few companies to process – consider doing the Company year-end for each one individually and use the guidance from scenario 1 for each 
  3. You have a lot of companies to process, with a relatively small number of these being part of a split company group or having pay expected to increase. Using the following process will mean that only a small fraction of your companies will need to be checked and updated manually: 
    1. Consider doing the Company year end and select All companies when given the option, then press Yes for both small employer and apprentice levy status. 
    2. Review the resulting report and identify the split companies and/or expected pay increases. For these companies only: 
      1. Highlight the ones with small employers relief this year set to ‘Y’ – these need the other linked companies to be considered and where appropriate manually change their small employers relief this year field to ‘N’. 
      2. If any part of a split company is not a small employer, the linked group cannot be a small employer so Payroll will have been correct to set these companies to ‘N’. 
      3. Highlight the ones with ‘Paying apprentice levy’ set to ‘N’ – these need the other connected companies and/or the expected pay increases to be considered and where appropriate manually change their ‘paying apprentice levy’ field to ‘Y’. 
      4. If any part of a group of connected companies has a pay bill exceeding £3 million the total across the group must also exceed the threshold so the apprentice levy must be paid. Again, Payroll would have been correct to set these companies to ‘Y’. 

To go back to the Company year-end article, click here.

To advance to the Employee year-end article, click here.

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