Payroll is often overlooked by business owners.
It should actually be one of your early priorities. Ensuring the correct processes are in place to complete your payroll is key to avoiding costly errors.
If you employ staff, you expect them to complete their work to an agreed standard, and in return your employees will expect to be paid correctly and on time – failure to do so will not only cause a breakdown in trust between employees and employers but could lead to costly HR issues.
No employees?
You may be thinking that payroll won’t apply to you because you are a sole Director running a Limited Company, no employees. Wrong! As a company Director and assuming you have shares you can only withdraw money from the company via payroll or dividends subject to your balance sheet being in a positive position.
Time Consuming
Completing payroll can be a time consuming exercise on a basic month, costing you in hours that could be better distributed in your business. Imagine how much time you could waste adding new employees, processing leavers, calculating holiday, maternity and sick pay while adjusting tax codes and calculating commissions, bonuses or authorised deductions….and what about when the calculations are incorrect? The cost of your time can soon add up, with no guarantee that you are processing your payroll correctly.
Pensions and Auto Enrolment
We continue to see new clients who have no idea that they should have auto enrolled their staff onto a workplace pension scheme.
As an employer you will now need to auto enrol your eligible employees onto a pension scheme, this is compulsory. Under the Pensions Act 2008, all eligible staff should have been automatically enrolled in their employer’s workplace pension scheme. Once your pension scheme is set up, you will be notified of your staging dates and you will have to complete a declaration every 3 years. The employees may opt out but it is your obligation to offer a pension scheme to all eligible staff.
The auto enrolment scheme is yet another complex payroll compliance that could trip you up should you fail to comply.
IR35
With the introduction of IR35, many businesses who use off payroll workers will find themselves incorrectly categorising employees as self employed contractors, which could lead to HMRC investigations and penalties.
HMRC advise “If you’re found to be within IR35 following an HMRC enquiry, you must pay HMRC the tax and National Insurance contributions due, as well as any interest due on these amounts.
If the circumstances of your case show that you didn’t exercise reasonable care in completing your tax and National Insurance contributions returns you may also have to pay a penalty.”
Read our IR35 case study here
At Avanti, our payroll bureau offers a comprehensive payroll solution and if you prefer we use a custom software that you are already using, we are happy to do this.
Whether weekly, fortnightly or monthly, Avanti offer a payroll solution for organisations of any size ensuring you comply with HMRC. In addition we also have great HR contacts should you have to deal with the often overlooked cost of payroll errors – unhappy employees. We can also help you to streamline your payroll process, saving you time and resources.
Failure to comply with the legislation that governs payroll could end in prosecution. Can you afford to navigate the complexities of payroll without the help of a payroll professional?
Ask yourself what value you put on your time, and then contact Avanti to see how much it would cost to outsource your payroll.
Avanti – Moving You and Your Business Forward.