Delay happened in payroll registration

[nimilnair]

Hello

I am the sole director of a company registered in the UK. I wanted some issues to get clarified from the experts. Here I will tell you my situation:

My company was registered in 2012 as an IT service provider. I applied for Tier 1 Entrepreneurship visa under the investment for this company. Presently I am on this visa, granted on January 2013.

The company was running with some minimal projects and making very small profits for one year. Most of my Investment and profits were gone for promotion of the company activities and purchasing software and hardware tools required for the services. In 2014 the company got some leads for a good software development project. I applied for the employee sponsorship license and brought a software developer under Shortage Occupation List.

The new employee, under Tier 2, arrived in the UK in April 2014, but the expected software development project was not started at time because of the delay from the client's side. It caused a financial crisis and I was not able to pay the salary to the newly arrived employee.

I discussed the situation with the employee and he suggested some alternatives to me- Without demanding for the salary he started developing some custom mobile apps and brought them into our website. Within 6 months we received another business enquiries from other set of clients based on his initiatives.

6 moths after the new employee's arrival, things started moving fine and we started earning profit. But the financial crisis caused a delay of 7 months in registering the new employee's payroll and reporting it to the HMRC. Presently he is in our payroll from last 2 months.

The employee has no complaint against the salary dues of the previous months' but I am cautious about the outcome of the delay in his salary payment & payroll registration.

My questions are:

1) What are the exact aftermaths of such delays in payroll registration in immigration/ home office affairs if they inspect our office and find the documents and the delay?

2) Is this only a mater of labour laws, or is it going to affect our sponsorship license, or my tier 1 Entrepreneurship visa in any ways?

3) I had read an article on http://goo.gl/89u6az about payroll registration delays and its forthcoming actions after 6 March 2015, but it does not mention anything about the prevailing actions from the authorities. May I know what all are them?

Please advice!

May Thanks.

[Frontier Mole]

Are you going to pay him for the months that he was not paid?

[nimilnair]

Hello

Yes, I am ready to pay him for the months he was not paid, but his payroll started only a few months back- that means, there was no running payroll for the first six months.

[Frontier Mole]

As long as he is paid for all the previous months you will meet the requirement under tier 2.
If you were audited it will throw up a question but it will not have an inverse impact on the licence if the above is undertaken and demonstrable.
They will have a go at you on the recruitment front tho as you took on a tier 2 employee when there was not a genuine vacancy. So be mindful that you are not completely out of the woods.
If they had visited during the non payment period you would have almost certainly lost your licence.

[nimilnair]

Hello

Thanks for the detailed reply. One more, may I know whether it is possible to pay the employee for the months that are without having the payroll entries- that is, paying the dues right now for the first six months?

Please advice.

Regards.

[Frontier Mole]

Don't get to hung up on a payroll system.
UKVI just want to see the salary quoted on the COS gets paid. They only look at payslips and your bank statements to verify that.
HMRC don't care about when employees get paid, they just want to make sure that it all gets declared and the tax & NI is accounted for.
So if you pay all the back pay in one go that will cover off the bases. Cash flow permitting. Doing it over three months is of no consequence to HMRC as long as it is accounted for in the correct tax year.
UKVI risk remains until it is all paid.