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HMRC internal manual

PAYE Manual

Employer records: employer types: school funding arrangements (Action Guide)

If you are required to open a PAYE scheme for a LEA school that has opted to hold the funds for its own payroll, follow steps 1 - 2 below.

For details of how to access any of the Employer Business Service functions, use PAYE057.

1. If you receive notification that a school has opted to hold the payroll funds, and pay their staff direct
  * Use Function EMPLOYER SET UP to open a new employer record. For more information see PAYE20136
2. Write to the school and advise them
  * That a new employer record has been opened
  * The office number and references allocated
  * That details of the employees affected should be forwarded, with any form(s) P45(3) held