Avanti: Payroll Compliance – The Basics

If you are an Employer you must comply with payroll legislation. Avanti explains the basics of compliance and some areas that you’ll need to consider.

Payroll is more than periodically paying your staff and encompasses salaries, bonuses, authorised deductions, sick pay, paternity pay, maternity pay and any other employee benefits you may provide. You will also process both new employees and leavers as well as tax code changes through your payroll. With this in mind,  you need to be aware of the links to tax and your duties as the business owner to ensure that you comply.

What happens when a new starter joins your business?

Firstly, you need to understand the status of your new starter. With IR35 legislation comes the risk that you could inadvertently declare an employee as a self employed contractor. You’ll need to explore the criteria and check that they have the correct working status with your organisation. Obtain all the details you require from the new starter in writing and confirm them before you add the details  to your payroll, a simple error at this point could result in problems further down the road, such as an employee paying the incorrect amount of tax, or delays in the payroll process.

You’ll also need to auto enrol for a pension scheme and all eligible employees must be enrolled. The employee can choose to opt out but you are required by The Pensions Regulator  to follow your staging date and complete a 3 yearly declaration of compliance. If you miss your staging date, you will need to backdate any pension contributions owed to eligible employees. You may be exempt, if this is the case you must notify HMRC.

Paying your staff

Each time you pay an employee you must declare this to HMRC, whether that is weekly, fortnightly or monthly, the declaration must be submitted to HMRC on or before the date the payment is made via the Real Time Information (RTI) requirements.

Payroll in your business

These are of course the basic elements of payroll, each business will have unique circumstances. Other things to consider when choosing how to run your payroll, whether internally, outsourced or through bespoke software are;

How do you record time for your employees?

How do you process overtime?

Do you employ beyond your local area? If for example, you employ internationally you would need to consider the wider implications of this and how your payroll is processed for those employees.

Is your staff turnover high? You may use seasonal workers, creating a constant flow of new starters and leavers. If this is the case, you need to use a system that can streamline this process for you.

Failure to comply with the legislation that governs payroll could end in prosecution. Can you afford to navigate the complexities of payroll without the help of a payroll professional?

It is important, however your payroll process is completed, it meets the needs of your business and complies with HMRC. If you are losing hours processing payroll, contact Avanti (08000) 388 799 to see how their payroll bureau can streamline the process whilst reminding you of your obligations to HMRC, and meeting the requirements of your business – giving you back your time to work on your business.

Avanti, moving you and your business forward.