What is PAYE?
PAYE is a system used by HMRC to collect Income Tax and National Insurance due from employees directly from the employer. If you are an employer then you will normally have to register and operate PAYE as part of your payroll.
You don’t need to register for PAYE if none of your employees are paid more than £123 a week, have another job or get a pension.
When you make a payment to an employee via PAYE you will need to calculate and deduct tax and National Insurance for your employees. You may also be required to make deductions for student loan repayments or pension contributions.
Running a payroll correctly can be time consuming. Making accurate payments to your staff and accurate returns to HMRC is important and can be costly if you get it wrong.
Why not take the time and stress out of things by talking to Sherwin Currid who are experts in the field and help many firms meet their obligations.
Get support with your payroll by outsourcing to an expert
If you are not experienced in running payrolls, it is likely that you will find it a daunting exercise getting your head around everything that needs to be done.
Paying staff incorrectly can be very damaging for employee relationships and making incorrect returns and or payments to HMRC can be very costly.
Sherwin Currid have for many years provided payroll support to numerous companies saving them the stress, hassle and cost of running a payroll. If you are interested in talking to us about the support that we can provide for your payroll needs then please do not hesitate to get in touch.
What is involved with running a payroll?
Running a payroll must be managed carefully to ensure the correct calculations are made - this can be difficult if you don't have a finance team and you are busy with other important aspects of your business. You will need to consider the following:
Reporting your PAYE to HMRC using RTI
The payments that you make to employees along with the deductions that you make from the payments need to be reported to HMRC on or before your payday.
The calculation of what you need to pay and deduct and the filing of the information can be done using HMRC approved software.
You will also need to calculate and report on any deductions that you wish to make on your payments to HMRC such as for statutory sick pay or statutory maternity pay.
Making payments to HMRC
You will be able to see how much you owe HMRC based on the returns that you make to HMRC. The deductions you have made from employees less any deductions that you claim need to be paid over to HMRC on a monthly basis.
If you are a small employer and expect to pay less that £1,500 per month to HMRC then you can request to HMRC that you want to make quarterly payments.
Using up-to-date payroll software
Payroll is complicated and nowadays it is important that you use HMRC approved payroll software to calculate the pay and taxes of your employees and also to prepare and submit the various payroll returns that are needed on a monthly and annual basis.
HMRC provide very basic payroll software for free, however there are many much better and easier to use solutions available. Big software providers such as FreeAgent, Xero and Sage all provide compliant payroll software. Sherwin Currid Accountancy can and do work with all the major software providers in providing outsourced payroll services.
Sherwin Currid are experienced accountants and tax experts - we can help you meet your payroll and PAYE obligations.