As a business owner, you know that managing payroll in-house can be a complicated affair. The payroll process is time-consuming as the tasks include statutory sick pay, statutory maternity/ paternity/ adoption/ shared parental pay, student loan, holiday pay, bonuses, pension and various National Insurance classes, among other issues like preparation of various forms (such as P11, P35, P45, P46, P60) pertaining to employment.
Spending your time dealing with payroll may not make sense for a small business owner because there are other areas that need your attention. Equally, hiring a dedicated person in-house to manage payroll for a small team seems excessive too. This is why it makes sense to outsource your payroll administration to a professional payroll company like Tax Agility.
Here are the five reasons why outsourcing your payroll administration is a smart move.
Focus on other aspects of your business
As an employer, you are obligated to record your employees’ salary in payroll software, even if they get less than £116 a week. The process involves:
- Calculating deductions (taxes and National Insurance) from their pay.
- Calculating the company’s National Insurance contribution if their earnings are above £157 a week.
- Producing payslips for every employee.
- Submitting their pay and deductions to HMRC in a Full Payment Submission (FPS).
- Recording the payments.
Dealing with payroll is a time-consuming task. Every hour you spend on payroll administration is an hour that could be better spent developing your business or growing your business network. By allowing us to manage your payroll, you can turn your focus back achieving your business goal.
Lower your risks
Payroll is an on-going process that requires constant attention as HMRC is quick to issue a penalty. For example, in addition to paying your employees, you need to pay HMRC for the National Insurance contributions by the 22nd day of every month, otherwise you may have to pay a penalty.
In the event that you have paid your employees but forgotten to send the FPS to HMRC, they may also fine you.
When HMRC introduces a new law, like companies must now provide and pay into a workplace pension scheme for their employees, you need to be in full compliance of the law. The minimum contributions are 5% (2% from employer and 3% from employee) until 5 April 2019, then 8% (3% from employer and 5% from employee) after that day. With us staying on top of this issue, we can help you manage it so you’re compliant with the new law.
Outsourcing your payroll service can be highly cost-effective when you factor in the time spent on creating tax documents and monthly (or yearly) payroll software maintenance cost. You also don’t have to spend time learning the payroll software and manage the upgrade yourself.
Simplified National Insurance contributions
Splitting up into various categories, National Insurance contributions are complex. Understanding the classes – Class 1, 1A, 1B, 2, 3, 3A and 4 – alone require you to a good amount of time reading them. Leave them to the professionals because this is what we do best.
Full year-end payroll services
Every April, you will need to review your payroll reports, give your employees a P60 and prepare your employee records for the next tax year, plus you will also need to let HMRC know that it is your final EPS report of the year. There are certain dates you need to keep in mind, such as:
- Before 5 April: send your final EPS to HMRC.
- After 6 April: update your payroll software and employee payroll records.
- By 31 May: give your employees a P60.
- By 6 July: report employees expenses and benefits to HMRC.
- Our payroll service will gladly help you to manage the year-end payroll process.
Outsource your payroll administration to the professionals
If you want to spend less time on tedious payroll administration and more time on other areas of your business, the best thing you can do is to outsource the work to us. At Tax Agility, our team will provide you with consistent payroll administration as well as one-off payroll exercises like providing your employees with bonuses, overtime payments and commission.
Contact us today on 020 8108 0090 to discuss outsourcing your business’ payroll administration to our experienced accounting team in London. Alternatively, you can get in touch with us via our contact page to arrange a complimentary, no obligation meeting.
If you found this article useful, why not take a look at: