PAYE Payroll Solutions – FAQ

PAYE Payroll Solutions: FAQs and Things You Need to Know

Most small businesses which have expanded sufficiently to employ staff will be aware that payroll administration is a time-consuming, painstaking and costly affair. The manual method used mainly by small businesses requires constant updating as new legislation comes into existence as well as efficient administration – all disbursements to the Inland Revenue must be made by the 19th of each month and of course, all staff payments must be made reliably and accurately on the same day every month. Either a dedicated payroll administrator (or team) has to be appointed, or an employee has to divert resources that could be used more productively in the business into calculating employee pay, PAYE and NIC contributions, sick pay, holiday pay, and so on.

But over the last few years, a number of PAYE payroll solutions have become available, each of which aim to free up time and resources within a firm or organisation to concentrate o the primary tasks of the business. Here are a few frequently asked questions

1. Should I use an accountant for my PAYE payroll solution?

Aside from the traditional manual method (that is, using Tax Tables supplied by the Inland Revenue to manually calculate payroll), a number of other less time-consuming and laborious methods are available. Some businesses turn to accountants to take over payroll processing for them. Employers should be able to rely on good accountants to keep them updated on legislative changes, and they should supply “End of Year Returns” including all the completed documentation for payroll (i.e., P60s, P30s and P14s). Be aware that the service is not free and will usually be billed to the company as part of the accountant’s annual fee (although some charge separately for payroll services).

2. What about PAYE Payroll Solution Software?

Many business software suppliers now include payroll modules in their accounting packages. The simplest way to pay employees, of course, is via BACS, and the software can usually be linked to this system (it’s not always the most cost effective method, though).  If you’re considering this option, you’ll need to be rather savvy with your PC skills and with PAYE, and you’ll also need to have faith in your supplier to keep you reliably updated with new legislative changes. Bear in mind that the software isn’t cheap, and you’ll need regular upgrades, too, not to mention stationary costs.

3. Can I outsource to a specialist payroll service?

A few years ago, the answer to this would probably have been “no” unless you were a big company. But the landscape has changed and today, numerous Payroll Service Companies catering specifically for the SME market are readily available, offering a variety of payroll solutions.  You can choose the level of involvement that suits your needs (and your budget) most aptly, from traditional Bureau Solutions right up to fully managed payroll solutions. All Inland Revenue returns and all PAYE legislation changes will by handled by the payroll service company and, unlike in days of yore when only the might could afford them, they offer exceptionally cost effective solutions. More and more SMEs are choosing to outsource full Payroll responsibilities to these specialist third parties as a result.

How to make your business better

Payroll outsourcing frees precious time up amongst your workforce to concentrate on improving your business. One related option increasingly being taken up by SMEs is the use of more flexible employment alternatives to permanent staffing. If your business has a specific, time-limited project to complete such as upgrading an IT system, or your business telephone lines, you might not need to hire permanent staff. Umbrella companies can supply highly skilled workers for time-limited periods to complete particular projects – and they’ll take care of payroll for these contractors, too.