Close your PAYE scheme

If you find that you no longer need to operate a PAYE scheme payroll, you should close the scheme to avoid fines for RTI file non-submissions. This can occur because you’ve closed your business or have sold it and are going through a TUPE transfer arrangement.

How to close your PAYE scheme if you are closing your business

You can’t cease a PAYE scheme if there are live employees, so all employees must be terminated and issued a P45.

1. Terminate all employees. See Terminate and delete an employee for a step-by-step guide to this process.
2. Contact UK Payroll Support for assistance in marking your final Full Payment Submission as “final” and noting the cessation date. This will let HMRC know to expect no further submissions and that they should close the scheme at their end, too.

How to close your PAYE scheme if you are going through a TUPE transfer arrangement

1. Complete the two steps above, as if you were closing your business.
2. You may not want to issue a P45 to your employees, but you will need to provide the P45s to the person operating the payroll for the PAYE scheme to which they are transferring.
3. If you are operating a PAYE scheme for employees who have joined as part of a TUPE transfer, make sure their continuous employment date is reported on the Full Payment Submission as their start date for the original company. Their start date in the new company should be noted in a date joined field. This will ensure they have the relevant length of service noted in their record, and won’t impact their statutory benefits and redundancy pay.