Payroll services
Our payroll services
If you employ someone, who can be your family members, to help in your business and their pay is £123 or more per week, you must register for payroll/PAYE with HMRC even though only one staff is employed. You also have to report your payroll information (your employee’s pay and deductions (Tax and NICs)) to HMRC on or before each payday. There will be a penalty for not reporting your payroll information on time. In order to avoid the penalty, it is therefore important to report it for each pay period. The penalty depends on the number of employees you have. You will be charged late payment penalties on PAYE amounts that are not paid in full and on time.
You must also keep your payroll records for three years from the end of the tax year to which they relate.
M&W Accountancy Services provides payroll services to small and very small businesses in Bracknell, including all Berkshire and the surrounding areas. We can help you with:
1. payroll registration
2. monthly or annual payroll calculation & submission
3. workplace pensions registration (automatic enrolment)
4. pension contributions and submission
PAYE and Pension Registration
When your business starts employing staff, even just one person, you, as an employer, may have to register your business for payroll with HMRC. Besides, you are responsible for informing HMRC of your employee’s pay and tax & NIC deductions and paying over the amount due to HMRC.
A sole trader and a partner in a business partnership cannot pay a salary to themselves or be employee of their own business because the business is not a separate legal person from its owner. Any money taken from business for themselves is treated as an owner withdrawal, not salary. Although partners may agree to pay a salary to some partners, this so-called salary is part of the partners’ profit or loss sharing from the business, not actually salary. So a sole trader and self-employed individual can only register for payroll if they employ someone.
In contrast, a company is a separate legal entity (shareholders and company are treated as a different legal person). This means the company can employ its owner as employee. If you, as an owner and director of your own company, wish to pay yourself a salary, you will need PAYE registration even if you employ just yourself as the only director of your own company.
We have experience in helping clients register their business for payroll and report their payroll information to HMRC. We can also help register your business for workplace pensions. Talk to us today if you need payroll services.
Payroll Submission
In addition to payroll registration and as part of our payroll services, we will submit your payroll information to HMRC too. The submission will be through payroll software using Real Time Information (RTI). It will show deductions (income tax, employee & employer National Insurance Contributions and also employee and employer pension contributions) from your employee’s pay. You still have to submit your payroll information to HMRC even though your employee receives no pay at all in that pay period. We can process and file your payroll on a monthly or annual basis.
Workplace pensions (automatic enrolment)
The Pensions Act 2008 requires all UK employers, who employ at least one person, to provide and put certain employees into a workplace pension scheme (called automatic enrolment) and contribute towards the scheme. Although automatic enrolment duties are employers’ legal responsibilities, they may ask accountants for help. For a first time employer, their automatic enrolment duties start from the day their new employee begins working for them.
Eligible employees will be automatically enrolled and the employer must contribute into their pension scheme if they:
1. are classed as a worker
2. are aged between 22 and State Pension age
3. earn £10,000 or more per annum
4. normally work in the UK
Although they are eligible for automatic enrolment, they can opt out of the scheme if they wish. Employers do not need to automatically enrol employees who do not meet the above criteria but they can join the scheme by opting in and if they want to join, the employer cannot refuse to enrol them. The aim for this automatic enrolment is to help employees save for their retirement.
Workplace pension contributions
Both employee and employer must make contributions into the pension scheme if the employee is an eligible job holder and automatically enrolled. Employers do not have to make contributions if the employee earns:
a) £520 or less per month
b) £120 or less per week
c) £480 or less over 4 weeks
Employees who are not eligible for automatic enrolment can choose to opt in. The employer must contribute if they earn more than:
a) £520 a month
b) £120 a week
c) £480 over 4 weeks
Tax code
All employees have a tax code, which is a tax-free income they can earn each year. There are several tax codes for employees such as 1257L or BR. A tax code 1257L means you can earn £12,570 tax free. The tax code is used to calculate tax deductions from your pay. HMRC, however, can amend the tax code to reflect changes in your circumstances such as benefits you start to receive from your employer or other income you have e.g. a second job. A normal tax code for a majority of employees who have only one job, no untaxed income, unpaid tax or taxable benefits for 2021-22 is 1257L
Need payroll services?
Employers employing an employee who earns £123 or more per week or £533 or more a month or £6,396 or more pa (for 2022-23 tax year) must register for PAYE, report the payroll information and pay over the tax & NI deductions to HMRC. Missed payments may be penalised.
Penalites for not reporting or late reporting the payroll information may be issued. These depend on the number of employees the employer has. For example, a monthly penalty charge is £100 if the number of employees is between 1 and 9.
Our payroll services are flexible and affordable. If your business is planning to employ staff or is looking for help with your registration and submission, we are one of the best payroll services providers in Brackbell and we can help you with your payroll and payroll-related needs.
Contact us today for our quality and reliable payroll services.