Payroll services

Payroll & Pensions

Our Payroll services

MW Accounting Services provides payroll services to small businesses in Bracknell.. Our payroll services cover

  1. PAYE registration for employers (sole traders, partnerships and limited companies)
  2. monthly or annual payroll calculation & submission
  3. workplace pensions (automatic enrolment)
  4. pension contributions and submission

PAYE Registration

Whether your business is operating as a sole trader, partnership or limited company and if you employ, even just, one person, then you, as an employer, are responsible for informing HMRC of your employee’s pay. You also have to deduct income tax and National Insurance from your employee’s pay and pay it over to HMRC. In order to do this, you must register your business for payroll with HMRC and we will help you do this. After registering, HMRC will issue Employer PAYE Reference and Accounts Office Reference to your business. These 2 References are required when filing the payroll.

If you are a sole trader or a partner in a business partnership, you cannot be an employee of your own business so you cannot be on your business payroll. This is because your business is not a separate legal person from you so any money you take from your business for yourself is treated as an owner withdrawal, not salary. The same applies to a partner in a partnership. Although the partners may agree to pay salary from the business partnership to some partners, this so-called salary is part of the partners’ profit or loss sharing from the business, not actually salary.

In contrast, a company is a separate legal entity. So you and your business are treated as a different legal person. This means your company can employ you and you can be on your company payroll. Thus if you are a director of your own company and wish to pay yourself monthly or annual salary, you will need PAYE registration for your company too even if you employ just yourself as the only director of your own company.

Further, we will also help register your business for workplace pensions as well because most employers now have obligations to contribute towards their employees’ workplace pensions.

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 commercial payroll software. It will show all deductions (income tax, both employee and employer National Insurance Contributions and also both employee and employer pension contributions) from your employee’s pay. We can process and file your payroll on a monthly or annual basis. And you still have to submit your payroll information to HMRC even though your employee receives no pay at all in that pay period.

Workplace pensions (automatic enrolment)

The Pensions Act 2008 requires all employers in the UK, 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 the above employees are eligible for automatic enrolment, they can choose to opt out of the scheme if they wish. Employers do not need to automatically enrol employees who do meet the above criteria but these employees can voluntarily join in 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 (and so they can treat themselves to their dream holiday!).

Workplace pension contributions

If the employee is an eligible job holder and automatically enrolled, then both employee and employer must make contributions into the pension scheme. The contributions are based on and are a percentage of the employee’s total earnings between £6,240 and £50,270 in that period. Total earnings include:

  1. salary or wages
  2. bonuses and commissions
  3. overtime pay
  4. statutory sick pay
  5. statutory maternity, paternity or adoption pay

And from April 2019, the minimum contributions by employee and employer are as follows:

employeeemployertotal
contributions5 (%)3 (%)8 (%)

Employers do not have to make contributions into the pension scheme if the employee earns:

  1. £520 or less a month
  2. £120 or less a week
  3. £480 or less over 4 weeks

For employees who are not eligible for automatic enrolment but choose to opt in (voluntarily enrol), the employer must contribute the above minimum amount if these employees earn more than:

  1. £520 a month
  2. £120 a week
  3. £480 over 4 weeks

Other matters relating to PAYE include:

Tax code

All employees will 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. If your tax code is, for example, 1257L, this tax code is your Personal Allowance. In other words, it means you can earn £12,570 tax free. 

The tax code is used to calculate the income tax deduction from the your pay. HMRC, however, can amend your tax code to reflect changes in your circumstances such as benefits you start to receive from your employer or other income you have, for instance, 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

Penalties

There may be penalties either for not or for late reporting your PAYE information. In order to avoid these penalties, it is therefore important to report it for each pay period. The penalties will depend on the number of employees you have.

No. of employeesmonthly penalty charge (£)
1-9100
10-49200
50-249300
250 or more400

These penalties are either for

  1. inaccurate payroll info; or
  2. deliberate errors; or
  3. careless errors

Need payroll services

So if you look for all the payroll services in Bracknell, we are one of the best providers and we can help you with all the payroll needs. 

Contact us for our quality and reliable payroll services as well as our workplace pensions services.