Pixel

Top 8 Payroll Tips

Gary Green
Gary Green
December 30, 2020

If you need some payroll tips for the small business, you've come to the right place. Key Business Consultants has you covered.

In today's article, we'll give you our top 8 payroll tips. Remember, payroll can be complicated. If you would like professional help, please get in touch. We'd be happy to arrange a free, no-obligation chat.

If you decide to do it yourself, make sure you read the HMRC guidelines to PAYE.

1. Get Your PAYE Number

Even if you only have one employee, you need to register as an employee. This involves setting up your PAYE scheme.

Once you register, you'll be given a unique employer PAYE number. You'll use this to identify yourself to HMRC and pay any taxes due. It can take up to five working days to get the number, so don't leave it to the last minute.

2. Make Sure You're Insured

If you employ one or more people, you need to arrange Employers Liability Insurance. This is a legal requirement so don't think you can do without.

Your policy must be for at least £5m. You can find out the details here.

3. Tell HMRC About New Employees

When you bring on a new employee, you need to tell HMRC. Ask the new staff member for his/her P45 from their last job. This has details of their tax status.

If the new employee doesn't have a P45, HMRC can still figure out their tax code. It just means you have to fill in a "starter checklist".

4. Stay On Top Of Minimum Wage Rules

UK employers are regulated by the National Minimum Wage rules. As of April 2020, the "living wage" is £8.72 per hour. The minimum wage depends on categories such as age.

Even though minimum and living wages are presented hourly, they apply to everyone. Even if your staff are paid monthly, they must receive the minimum amount.

5. Don't Forget Pensions

In 2020, all employers are required to enrol staff into a pension scheme. The individual employee is then allowed to opt out.

There are various rules and amounts to stay on top of. Check out the Pensions Advisory Service to make sure you are compliant.

6. Send Your FPS On Time

After each payroll run, you need to tell HMRC all the details. You do this by sending them a Full Payment Submission (FPS).

If you have good accounting/payroll software, this is relatively easy to do. Make sure you stay on top of this and don't let a backlog build up.

7. Stay IR35 Compliant

HMRC tries to prevent employees from claiming to be self-employed consultants. If a staff member works for you as a de facto employee, they need to pay the right amount of income tax. This is the case even if they claim to be "off-payroll".

Recent rule changes mean that you, as the employer, need to make sure this is being adhered to. You may want to work with an employment lawyer or professional accountant to make sure you're compliant.

8. Claim Deductions Via EPS

HMRC offers plenty of help for small businesses. For example, there is an "allowance" for National Insurance that you can claim.

To claim, make sure you submit an Employer Payment Summary (EPS) after each payroll run. This allows HMRC to see if you are due any deductions. Your payroll software makes this a relatively easy experience.

If you'd like us to help you with your payroll, please get in touch. Payroll is a tricky part of small business accounting, and it's often better to outsource it to an expert. We've worked with hundreds of small businesses and would be delighted to discuss your needs.

Interested in our services?
Fill in your details and a member of our experienced team will be in touch shortly to discuss your needs.
We adhere to strict GDPR rules and do not reveal or sell your data to any third-parties. For more, please read our Privacy Policy.
Latest Insights
March 4, 2022
An Overview of EIS (Enterprise Investment Scheme) - All You Need to Know

There are several benefits for the EIS, or Enterprise Investment Scheme, to make this an interesting...

March 3, 2022
Tax Relief for Angel Investors: Gary Green's Webinar for Stakeholderz

Key Business Consultants' principal Gary Green spoke with Stakeholderz discussing the SEIS & EIS scheme and...

February 23, 2022
What Are EMI Share Schemes? All You Need to Know

If you are considering awarding shares to your employees, an Enterprise Management Incentive is often the...

January 31, 2022
Payments on Leaving Employment: How to Reduce Your Tax Liability

Normally the process for leaving employment is quick and straightforward but this is not always the...

January 17, 2022
HMRC Investigations: What You Need to Know

Discovering that you are being investigated by HMRC can be very stressful, even if you are...

January 14, 2022
Business Transactions - Guide to Planning and Executing Efficiently

There are some transactions in business that are significant and require substantial forward-planning to be a...

January 12, 2022
Why Employee Equity is an Important Issue For Every Business

Being a business leader is about being willing to embrace innovation and be flexible about how...

January 10, 2022
An Employer’s Guide to Settlement Agreements

If you need to terminate the contract of an employee, a properly drafted settlement agreement can...

January 7, 2022
Taxation of Private Company Shares - What Should You Know?

Many companies opt to reward their employees with shares or options because of the manifold benefits...

View Our latest insights »
Get the latest UK tax & business news and guidance delivered straight to your inbox
We care about the protection of your data. No spam. Unsubscribe anytime.
Copyright © 2022 Key Business Consultants LLP. Reg: E&W OC389322
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram