Our Accountancy expert Services
Running a company comes with payroll commitments.
Not only are they a legal obligation, but they are essential to the smooth, financial running of your enterprise.
With our professional payroll management, your system is in experienced, capable hands.
Table of Contents
What Is Payroll?
Payroll is essential in any business with employees. It covers:
- How much you need to pay your employees
- How much tax and NIC you need to deduct from an employee’s gross pay
- What employee pay details you must report to HMRC
- How much tax you must pay HMRC
How Do I Set Up My Company’s Payroll?
To run your company payroll, you will first need to register as an employer with HMRC.
You need to do so before the first payday for your employees.
Give yourself enough time for this, because it can take up to five working days to get your employer PAYE reference number and accounts office reference number.
However, you cannot register more than two months before you start paying employees.
We can set up your company’s payroll on your behalf, using Xero software, which will then run automatically to suit your needs.
What Are The Reporting Requirements for Payroll?
You can run your payroll on a weekly or monthly basis, or a combination of the two, via Xero.
This system will:
- Record each employee’s pay, including their salary or wages and any other pay
- Calculate deductions from their pay, such as tax and National Insurance
- Calculates the National Insurance contribution that you’ll need to pay on employee earnings above £166 a week
- Produce payslips for each employee
- Report their pay and deductions to HMRC in a Full Payment Submission (FPS)
Why Are Payslips Important
Payslips must be given or made available to all employees on or before their payday and must show the following information:
- pay before any deductions (‘gross’ wages)
- deductions like tax and National Insurance
- pay after deductions (‘net’ wages)
- the number of hours worked, if the pay varies depending on time worked
Payslips can also include information like your employee’s National Insurance number and tax code, their rate of pay, and the total amount of pay and deductions so far in the tax year.
Are There Payroll Penalties?
You must run payroll according to HMRC requirements, or you could face penalties:
- Penalties for late filings start at £100 per month for employers with 1-9 employees, increasing to £400 per month for the largest employers
- Penalties for late payment are based on the amount that is due and start at 1 per cent, rising to 4 per cent depending on the number of times the employer defaults in the tax year
- Failure to settle any payment due within a six month period will lead to a further penalty of 5 per cent
Payroll Management Made Easy
We can manage your payroll for you, using the Xero automated system, giving you these benefits:
- Xero is connected to HMRC, so will automatically send employee updates and calculate tax charges
- It will send you email alerts 15 and 10 days before payroll processing, ensuring you pay your employees on time and provide the right information to HMRC
- In addition, we process all your payments independently, before submitting them via Xero, providing an extra layer of checking to guarantee you’re making correct payments
- As part of our payroll management, we can also calculate pension and national insurance contributions, and student loan repayments for your business.
We manage your payroll, leaving you to focus on your core business objectives.
Traditional Accounting with Clear Principles
Operating from our London head office, Venn Accounts a traditional accounting firm. We are committed to ensuring all our clients are completely clear about what we can do for them, while fully supporting them every step of the way.