Let’s start with the basics;
Outsourced payroll management vs software
Outsourcing your payroll services to a trained specialized company can reduce your cost base, as it negates the requirement to train, manage and employ an in-house professional to operate the payroll software and systems along with reporting to HMRC, issuing payslips and ensuring all current laws and practices are abided by.
If you already have the in-house capacity to manage dedicated payroll software such as xero, sage or kashflow then this could be a more efficient option as the software is generally not expensive, it’s the personnel to manage it that’s the significant investment. If your looking for payroll software, you can see our review section for up-to-date info on the best features and costs so you can start issuing payslips with ease.
Advice and support
Having a fully managed payroll team can provide you with the advice and support your business needs to grow. You may get all kinds of requests from employees that only a payroll professional will know the answers to. This can range from employee’s overseas tax bracket and double taxation issues, to general employment law you must follow to avoid penalties and possible legal ramifications. Having the experience of a professional team of payroll experts at the end of the phone is a great help should any of these issues arise.
Correct tax deduction
Having employees with incorrect taxes deducted from their pay packet can cause employees and managers alike a lot of stress and time dealing with these situations. Having your payroll managed by a professional company helps limit potential payslip deductions issues before they happen, and provide support should and problems occur.
End of year payroll processing
Your payroll will run when ever you decide; this is once a month but can also be weekly or bi-weekly. PAYE, national insurance, student loans and other deductions are calculated every time the payroll is run. You will also need to report to HMRC at the end of the year and action the following:
- Issue employees P60 by the 31st of May
- Update payroll software from 6th April (to ensure it’s compliant with any new rates and codes)
- Report employee’s expenses, deductions and benefits from the 6th of April
- Prepare for a new tax year starting on the 6th of April
Paying your employees pensions requires a firm understanding of payroll law, as the specific situation will require a different set of protocols. For example, an employee who has retired from ill health is calculated differently from one retired due to age. The correct code will also depend on if your pension scheme is recognized and registered with HMRC or not.
Avoidance of payroll penalties and problems
Calculating your payroll incorrectly can potentially have a large effect on your company’s income, it can also land you penalties from HMRC of up to £400 per month and 5% of the tax and national insurance your failed to report. The best way to ensure compliance and avoid penalties is to have a fully qualified outsourced team, or dedicated in-house resources.
Easily connect with your current accountant
Payroll and accountants are usually two separate services, but they work with each other to ensure your VAT, salary and business expenses are aligned.
Compare payroll services
Struggling to find payroll companies that match your requirements? We offer a 100% free service to asses your requirements and connect you with the correct payroll service provider. It’s a great way to navigate the market place in just a few minutes, we handle the due diligence and research and provide you with 4 quotes you can compare in your own time. It’s 100% no obligation, it helps the providers get in touch with serious customers (you) and it benefits you by saving a lot of research time finding the correct company. It’s win/win, join over 4,000 happy customers today.