As a small business owner in the UK, you would do well to learn the basics and specifics of the Pay-As-You-Earn system (PAYE). The PAYE system is a convenient method of paying government insurance contributions and income tax suited for small businesses in UK. This means that during every earning period, companies deduct tax and contribution from your employees' wages or occupational pension as opposed to collecting and paying taxes in one go.
When the tax office is unable give you a tax code for deducting the right amount of tax over the whole year, it may issue an emergency code with which to tax your employees. An emergency code means that your employees are only entitled to the basic personal allowance and will not take into account any other allowances and reliefs that they might be entitled to. In the event this happens, you'll just have to wait for the tax office to give a correct PAYE tax code and complete details of previous earnings and tax paid in a particular tax year, which will help you in tax planning and deduct the correct tax in the future. This will also allow refunds for any overpaid tax caused by the emergency code.
To get in-depth information and details on the PAYE system from tax specialists, get in touch with our professional advisers – our familiarity with tax laws in different countries D&V will definitely prove advantageous to you during the course of your tax planning.