I've Registered for PAYE but Have No Employees, Do I Need to Do Anything?

Yes, even with no employees on the payroll, an open PAYE scheme means HMRC still expects to hear from you. Instead of filing a full payroll return, you send a short “no payment for period” notice (an Employer Payment Summary, or EPS) by the 19th of the following month. Miss it and HMRC assumes a return is due and can raise a penalty.

It’s a common spot to be in. Maybe you’ve downsized, your team has moved on, or you registered ahead of a hire that hasn’t happened yet. Either way, your PAYE scheme is live, so having no employees and no payroll doesn’t switch off your reporting duty.

Normally you’d report through a Full Payment Submission (FPS) each time you pay someone. In a month where you pay nobody, there’s nothing to put on an FPS, so you tell HMRC that instead.

You send an Employer Payment Summary (EPS) with the “No payment for period” field completed. This tells HMRC that no FPS is coming and no PAYE is due for that tax month.

• Deadline: send the EPS by the 19th of the month following the tax month with no payments.
• If you skip it: HMRC still expects a return, so they can estimate what you owe and issue a charge and a late-filing penalty.
• Planning a quiet spell? If you know you won’t pay anyone for a while, use the “Period of inactivity” fields on the EPS to report a gap of between 1 and 12 months in advance, so you don’t file month by month.

Most payroll software has an EPS option built in; HMRC’s free Basic PAYE Tools can send one too. If you’re paying no one long-term, it can be worth asking HMRC to close the scheme instead, but only once you’re sure you won’t need it soon.

When you do bring someone on, the steps are straightforward:

1. Register as an employer with HMRC if you haven’t already. You can do this up to 2 months before your first payday, and you should register before that first payday. HMRC posts your PAYE reference, which can take a few days.
2. Set up payroll software that’s HMRC-recognised (or use Basic PAYE Tools) to work out tax and National Insurance and file your returns.
3. Tell HMRC about the new employee on or before their first payday, you do this through your first FPS for them, using their starter details (P45 or a starter checklist).

From that first payday, your monthly reporting switches from nil EPS returns to a normal FPS each pay run.

If you don’t send the return HMRC is expecting, you’ll face a monthly late-filing penalty based on the size of your scheme:

Your first late return in a tax year is usually penalty-free (this doesn’t apply to registered annual schemes), but it’s not worth relying on. Penalties are charged monthly and issued quarterly, and they add up fast, money far better spent on the business than on HMRC.

Keeping on top of nil returns, deadlines and new-starter filings is exactly the kind of routine our outsourced finance department takes off your plate.

If PAYE, RTI and payroll deadlines are eating into your week, we can run it for you. Call FD Works on 01454 300 999 or email [email protected].