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Payroll
Payroll is an essential part of any business as it
considerably affects the net income of the business and is subject to laws and
regulations.
We can help take all the responsibility and problems regarding payroll away. Ensuring you have a smooth problem free payroll service with accurate and relevant tax advice tailored to you businesses needs that even payroll departments for large corporations would be jealous of. |
Payroll
Payroll affects the net income of the business and is subject to laws and regulations. If done incorrectly, it can cause serious problems for the employer and the employee. Payroll is essentially the sum of all financial records of salaries of an employee which includes wages, bonuses and any deductions.
The government has legislated that the most cost effective way to collect taxes is by making employers collect the taxes on their behalf therefore Pay As You Earn (PAYE) system was introduced by the government.
PAYE
Pay As You Earn (PAYE) tax is applied on the income and is treated as advance payments of the income tax due. The amounts are refundable if they exceed the tax liability as determined on tax returns
Please see a handful of the issues below concerning PAYE (Pay As You Earn) system:
PAYE – Issues for Employers and Employees
As an employer you will have to take note of deadlines for filing forms and making payments to HM Revenue & Customs (HMRC). Please note that failure to submit the forms on time or missing the deadline of payment to HMRC will lead to fines which will only exceed your employment costs.
Employee Benefits
You need to be careful of the following if you are providing your staff with benefits such as company cars:
Other points of interest for employers
PAYE codes
A PAYE code is made up of numbers and letters and includes personal allowances and any gross deductions. The general rule is that the higher the number is in your tax code, the lesser the tax you will pay provided you are not on a ‘K’ code. If you are on a ‘K’ code it means that your deductions exceed your allowances and the higher the number, the more tax you will suffer. Some common mistakes include:
In order to ensure that the correct tax code number is maintained, the tax office should be notified of any changes whenever they occur.
Payroll affects the net income of the business and is subject to laws and regulations. If done incorrectly, it can cause serious problems for the employer and the employee. Payroll is essentially the sum of all financial records of salaries of an employee which includes wages, bonuses and any deductions.
The government has legislated that the most cost effective way to collect taxes is by making employers collect the taxes on their behalf therefore Pay As You Earn (PAYE) system was introduced by the government.
PAYE
Pay As You Earn (PAYE) tax is applied on the income and is treated as advance payments of the income tax due. The amounts are refundable if they exceed the tax liability as determined on tax returns
Please see a handful of the issues below concerning PAYE (Pay As You Earn) system:
PAYE – Issues for Employers and Employees
As an employer you will have to take note of deadlines for filing forms and making payments to HM Revenue & Customs (HMRC). Please note that failure to submit the forms on time or missing the deadline of payment to HMRC will lead to fines which will only exceed your employment costs.
Employee Benefits
You need to be careful of the following if you are providing your staff with benefits such as company cars:
- Classification of expenditure is difficult – sometimes seemingly unrelated expenditure, such as excessive staff entertaining, can be classified as a benefit.
- Employers have to pay a National Insurance charge on benefits in July each year.
- In order to avoid penalties, benefits must be declared to HMRC through the use of specific forms which must be submitted on time.
Other points of interest for employers
- Small businesses are able to pay their deductions quarterly rather than monthly which can help with cash flow especially for new ventures.
- Employers have an additional National Insurance liability which is based on salary levels paid to employees. This is paid to HMRC each month/quarter with the tax and National Insurance deducted from employees’ gross salaries.
PAYE codes
A PAYE code is made up of numbers and letters and includes personal allowances and any gross deductions. The general rule is that the higher the number is in your tax code, the lesser the tax you will pay provided you are not on a ‘K’ code. If you are on a ‘K’ code it means that your deductions exceed your allowances and the higher the number, the more tax you will suffer. Some common mistakes include:
- Employers sometimes delay in sending details of new employees to the tax office. This can delay the issue of a correct code number resulting in excessive tax deductions.
- The tax office will continue to charge the employees higher tax, even when they change their company cars for lower taxed models or stop using the cars altogether, if they are not informed of the change.
- The tax office will sometimes seek to recover unpaid tax in earlier years by reducing your tax code in the current year. All deductions should be checked to ensure that the arrangement does not duplicate any payments that you may have made directly to HMRC.
In order to ensure that the correct tax code number is maintained, the tax office should be notified of any changes whenever they occur.
How we can help
Tax Affinity Accountants have staff that are experts in payroll and HMRC compliance. And offer their clients a complete payroll service when businesses want to save time and hassle trying to be compliant with all HMRC requirements.
With staff members experienced in employment, contract law and HR management they also offer valuable advice on sick pay, maternity leave, employment contracts, recruitment, staff retention, and provide human resources consultancy services.
So get in touch today to discuss payroll, PAYE and any other employment related issues call 0800 043 4051 or get in touch with this link.
With staff members experienced in employment, contract law and HR management they also offer valuable advice on sick pay, maternity leave, employment contracts, recruitment, staff retention, and provide human resources consultancy services.
So get in touch today to discuss payroll, PAYE and any other employment related issues call 0800 043 4051 or get in touch with this link.