Setting up a new business is never easy. You’re always looking for an affordable accountant. If you’re an entrepreneur, that’s hard luck because you’re literally dealing with everything on your own. Apart from other things, payroll management is one of the trickiest things for most people.
In business operations, permits, legal requirements, inventory, and other elements keep your business going. When your business grows, you’ll be in need of more helping hands. Are you looking forward to hiring more people for your business? Employing more people comes with its own set of challenges.
In these circumstances, if you’ve to deal with the payroll management, that’s another challenge. If you go wrong with the payroll, you risk penalties from the HMRC, unhappy employees, and even possible lawsuits.
Contrary to popular belief, handling payroll goes beyond rewarding your staff. This means envelopes of money each month. Stay in line with your HMRC regulations and get things right. Here’s a simple guide for you.
Your employees get the work done, but they charge you for their services. It’s simply how life works. These regular payments come with a variety of elements. If you learn payroll management, half of your issues are resolved. You’re on the right track to explore affordable accountants.
You’ve got to withhold the right amount for tax. A retirement plan contributions, insurance premiums, and various benefits like sick and maternity leaves come with it.
You’re responsible for payday—before your employees are given their checks. Ensure that each amount has been withheld for taxes. Any overtime pays and the leaves have been recorded accordingly, reflecting your paychecks correctly.
Understand Payroll Legislation
To further understand your responsibilities as a new employer, you must first understand the UK law surrounding payroll legislation. It evolves constantly, but stay up to date with any changes. Make sure you’re checking up on everything when it comes to national minimum wage and national living wages. This ensures that your employees are paid correctly and according to national standards, regularly visit the government website.
Reporting to HMRC
As the business owner and employer, you’re expected to collect taxes from your employees. Let us help you get the right affordable accountant.
Handed over to these tax office during tax season, but reports should be filed regularly. These reports are proof of compliance in terms of paying and taxing your employees.-
This also helps the government know that you’re going to do your job fairly and correctly.
Every time payday comes around, you must send the HMRC a full payment submission (FPS) payroll report, which can be done using your chosen payroll software.
It has to contain the details of your employee’s wages, along with any deductions you have made.
Any employee expenses and benefits must also be included in the report, but this can also be done annually as opposed to complying with payroll time.
Maternity and sickness leave
Employers are mandated by the UK law to pay their employees during sickness or maternity leaves, also known as statutory pay.
The law currently dictates that employees eligible for statutory sick leaves must be paid £94.25 per week, which can go on for up to 28 weeks.
Maternity leaves, on the other hand, are currently at 90% of weekly earnings for the first six weeks.
For the next 33 weeks, however, the wage paid will be kept. It’s important to note that both of the types of statutory pay are tax-deductible, so make sure to get all the details correct.
The Bottom Line
While running a payroll may seem straightforward enough, the pitfalls behind it cause businesses to run in fear. With legal obligations and other rules to abide by, a single mistake can affect your entire business. Small businesses and startups choose to outsource their payroll. You may perhaps be one of the most innovative entrepreneurs out there. All you need to handle numbers with lacking resources could affect the integrity of your business.
It’s a full-time job alongside handling your business, demanding unparalleled attention from those conducting it. Learning about payroll is one thing, but ensuring that it operates efficiently is quite another—as a business only starting, it’s best to seek the help of professionals.
For an affordable accountant, Cheap Accountants in London is the best place to call. As a well-recognized accounting firm in the UK, we offer a wide range of taxation services and tailored accounting, all guaranteed to be of the highest standard. Allow us to focus on your business’s numbers, and we’ll let you do what you do best. For more information, reach out to our team of experts today.