When dealing with payroll, many may assume that it is something that can be done in-house and is relatively straightforward. Dealing with payroll alone could be a viable solution for new businesses or start-ups, but as the business grows, so do the responsibilities.
This means that more time and money will need to be invested into payroll, and one simple error could cause many difficult to resolve problems . As such, it’s important that a business has a robust payroll solution in place.
The complexity of payroll along with the time that needs to be invested are both contributing factors to be considered when deciding whether to should outsource your payroll.
The Responsibilities of a Company
Regardless of who deals with the payroll, the legal responsibility for performing it correctly will always be that of the company. So, any errors or ommisions, along with any fines that result from them, will have to be borne by the employer.
This alone can be enough reason to outsource your payroll to a professional firm which is fully experienced with HMRC deadlines.
The responsibilities of a business can vary in some instances, but the following examples are just an overview of what duties are involved when dealing with payroll.
Deductions at Source
It goes without saying that it’s important that employees are paid on time. It’s also vital that the correct deductions are calculated so that your HMRC PAYE obligations are fulfilled.
Most employees will operate on PAYE basis. This will ensure that National Insurance contributions and income tax is paid to the HMRC before the net payment is transferred to the employee.
However, these aren’t the only deductions that need to be considered. For example, it’s compulsory that any employees are automatically enrolled into the workplace pension scheme if they are aged between 22 and state pension age and earn £10,000 per annum or more.
The only times an employee shouldn’t be automatically enrolled is if they earn under £10,000 or have chosen to opt out of the scheme.
The relevant pension legislation dictated an 8% deduction at source from 6th April 2019. This deduction covers the 5% made by the employee and the employer contribution of 3%.
Other deductions could relate to something else completely, such as a court order that instructs an employee to pay an amount owed via deductions from their wages.
As you can see, it’s normal for the responsibilities to pile up, and over time these responsibilities can grow to become an administrative nightmare.
Ensuring Payment Dates are Correct
Some businesses may offer one payment date for all employees, while others may pay employees at different types depending on their role.
Regardless of how employees are paid, it’s of the utmost importance that wages are paid on time. Not only can late payments cause low morale around the workplace, but they could also impact the private life of certain employees, meaning that financial worries are impacting their efficiency at work.
Making the Right Payments
Just as it’s important to ensure that employees are paid on time, it’s also important that employees are receiving the corect amount when it comes to the payment date.
Not only can there be different hourly rates and deductions to consider, but also ensuring that all employees are at least receiving the minimum wage.
This is a legal requirement of all businesses and the minimum wage should always be reviewed. From 6th April 2019, the minimum wage will be £8.21, and there is a chance this could change again depending of the outcome surrounding current Brexit talks.
As well as staying abreast of the responsibilities of the company, those undertaking their own payroll will need to ensure that they’re reviewing the financial climate to see if any changes need to be made.
Reporting to the HMRC
Reporting information to the HMRC is another integral part of a successful payroll. However, if information isn’t reported in the right way or is delayed, the company could face costly fines.
When running payroll, it’s common for the software being used to include an option to send an FPS (Full Payment Schedule) to the HMRC. This details what employees have been paid, as well as the amount along with other information such as deductions.
Employers will also need to report any changes, such as employees who have left the company and anytime a workplace pension is started.
The Benefits of Outsourcing Your Payroll?
Some companies may feel that they can perform payroll in house, but as the hiring of employees increases, so does the work that needs to be carried out. This means that over time, the running of payroll can become a significant cost to a company.
Outsourcing the payroll function of the business is often more cost-effective, and gives you access to seasoned professionals that are fully aware of all the deadlines and deductions that apply with PAYE.
In addition, payroll companies and accountants will also be more familiar with the inner workings of the HMRC, meaning that avoiding penalties and meeting submission deadlines is straightforward.
Here at The Financial Management Centre we process the payroll for hundreds of companies. From one-person companies to SME’s to large multi-site corporates – we understand that a one size fits all approach will not work and tailor a payroll solution that is unique to you .
Why outsource your payroll to The Financial Management Centre
Beyond the benefits of outsourcing to a well-established national firm of accountants, we offer:
- Easy to use systems, just fill in the blanks and we will calculate all deductions and send back the fully completed payslips to you
- Whether your staff are full time or part time, or work regular or irregular hours, or flexibility allows us to process any type of payments
- Staff who are dedicated to processing payroll on behalf of other companies. Providing expertise for any questions you have and with very fast turnaround times
- Multi site functionality. If your company has multiple sites with potentially different reporting times, processing dates, and internal contacts we can process and amalgamate this information and provide a seamless service
- All statutory documents produced. P35, P60, P14, P46, P11D, as well as full and comprehensive payroll deduction report are created so that you can meet all your legal requirements
All this functionality comes at extremely competitive rates – so why not let the team at The Financial Management Centre take the strain of your payroll. We are a national company with a local presence so to find your nearest branch and discuss your requirements then please call us today on 0800 470 4820 or email [email protected].