The Basics on PAYE and Submitting Reports to HMRC: What You should Know

04-Aug-2016

I like this.

By







If you speak with a manager or owner of a business and ask what the greatest difficulty is when running an enterprise, several answers may come up; depending on whom you ask, you may be informed that it’s either financial concerns, people management, delivery, debts or collecting, and so on. But here’s a guarantee: managing the payroll is sure to be at the top of the list of difficult tasks, and for good reason. Not only is it imperative that payroll management is done correctly, it’s a job that requires time, meticulous record keeping, and understanding the laws, rules, and regulations. Payroll management is no joke, after all – too much depends on it. For those who are struggling with this constantly recurring undertaking, here are the basics on PAYE and submitting reports to HMRC: what you should know.

What is PAYE?

PAYE is the system developed by HMRC (HM Revenue and Customs) that collects taxes and National Insurance from employment. As an employer, you will normally have to operate PAYE as part of your payroll management. The only exception is when an employee earns less than £112 per week – although you still have to keep all the records of those employees.

Deductions

The payments you make to your employees are determined by the contract and by laws and regulations; they include salaries and wages, tips or bonuses, and other additions such as statutory sick pay or maternity and paternity pay. From these payments, taxes and national insurance is deducted. However, there may be other deductions depending on the situation of the employee, such as school loan deductions, and so on.

Reports

You need to report to HMRC all payments and deductions, on or before each payday. If you have a software package, it should help you determine what those payments are and allow you to send those reports electronically. You will also have to report other matters, such as when your company is joined by a new employee, or when the circumstances of a certain employee changes (such as retirement, etc).

If you feel that the world of legal obligations and taxation is too difficult to make sense of, have heart; you’re not alone. Although HMRC claims it tries to make it as easy and convenient for business owners to follow the guidelines and fulfill their obligations, managing payroll properly is still a stressful task for many. Luckily there’s good news: there are professionals out there who can do the job for you, or who can advise you perfectly on the ins and outs of payroll management. If you’re like many others who struggle every month, make sure to see how your business can benefit from payroll outsourcing.


Tags: , , , , , , , , , , , ,

Post a Comment

Your email is never published nor shared. Required fields are marked *

*
*

Subscribe without commenting