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Alleviate your Payroll Headache
The management of the payroll function has never been more demanding for business owners. With tax credits, student loans, maternity and paternity leave, sick pay and child maintenance, in addition to the promise of more employment legislation being introduced, the burden to companies who still do their payroll in-house using a software package or paper-based system is enormous.
Payroll compliance can easily become a full time job even for small businesses and getting it wrong can carry severe penalties. Keeping track of payroll regulations and changes, as well as calculating the actual payroll amounts and deductions, can be very labour intensive and restrictive, as it needs to be done to a fixed timetable, explains Joseph Robinson from London, chartered accountants, Robinsons.
A simple solution to this is outsourcing, which is a cost-effective answer, even for firms with a small number of employees. Business-owners can hire a firm of professionals, such as Robinsons, to manage their payroll. By outsourcing, business owners can also take advantage of a newly introduced incentive scheme for filing end of year returns on line which can result in a PAYE refund of up to £825 paid out through PAYE over 5 years.
In his 2002 Budget, the Chancellor announced the implementation of the Payroll Process Improvement Programme, including the electronic filing of returns by employers, explains Robinson.
The Inland Revenue web site now includes a section on the new rules regarding payroll filing, which will become mandatory for some employers in just over two years time. Employers with 250 or more employees, will be required to file payroll annual returns electronically from 2005, which means that the 2004/05 annual return will be electronic. Employers with between 50 and 249 employees must start in 2006 with end of year returns for 2005/06. The Inland Revenue web site contains several pages of information about the preparations that employers will have to make, and the financial incentives available to smaller businesses to encourage them to adopt electronic filing earlier than their 2010 deadline.
The new site includes pages for each category of employer providing details about the requirements of the law and how employers can fulfil their obligations. There are also plenty of details regarding the incentive scheme and information about mandatory e-payment and the surcharges for late payment.
At present incentive payments worth up to £825 are on offer to small businesses (with fewer than 50 employees). The Government would like to ‘speed up’ the online process, and is therefore offering incentive payments from the next financial year. As the payments are calculated on a sliding scale, the sooner you change over the more you get. Businesses that start online submission from the next financial year will be able to claim a total of £825, and seeing as you will have to submit your documents online eventually, you may as well start now.
This new implementation will have an effect on some 9,000 employers, and not all of them will be aware of what the changes actually entail:
Did You Know…
- Electronic filing will be via the Internet only
- There are financial penalties for failure to comply
- Submission by paper is to be abolished
You Must…
- Be informed and fully aware of the major changes and impact to your payroll procedures
- Start planning now on how you will best manage this change
- Consider the impact on your payroll operation
To be eligible for the money, you must have the right payroll software and register with the Inland Revenue. Robinsons already offer a payroll service that fits the criteria, and will even take care of claiming the incentive payment offered by the Government for you.
Through payroll outsourcing, business owners can alleviate the administrative burden and focus on their core business. Ultimately this provides a direct benefit to the business and the bottom line.
Further information
For more information about outsourcing contact Joseph Robinson on 020 7684 0707.
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