PAYE & Payroll Guide

Payroll Solutions

There are a number of solutions commonly used by SMEs to resolve the problems of PAYE.

1. Outsourcing Payroll Specialists.

Until fairly recently this type of service was thought to be the domain of large employers only.

However, there are now a significant number of specialist Payroll Service Companies who will provide a variety of Payroll Solutions for the SME market.
These range from traditional Bureau Solution to 'Fully Managed' Payroll Solutions.
The employer can choose their level of involvement and select the option that suits them best.

Responsibility for all PAYE Legislation and Inland Revenue returns should be included as well as a choice of payment processes.

In the current market place employers are beginning to realise the benefits of outsourcing the whole responsibility of Payroll to a third party.

Despite existing perceptions these Specialists Providers can prove to be extremely cost effective when compared to other ways of calculating Payroll.

2. In-house Software.

Ready available from a number of suppliers who normally add Payroll modules to their Accounting Packages. Most can be linked to BACS, which is possibly the simplest way to pay your employees, although not always the most cost effective. Cheques can also be used to good effect. However users will need a certain level of expertise in both PC and PAYE skills which may not suit all small businesses. Changes in legislation will also require regular upgrades from your supplier.

Cost considerations can include:- Initial Software costs, Regular upgrades, Stationary costs etc.

3. Accountants.

Most Accountants will offer a Payroll service in various guises.
Some are specialists and some less so but on the whole they are able to calculate payroll effectively. As part of their service they should also be able to supply support to the Employer on all PAYE legislation changes.

Experience shows that they may levy their charges for Payroll as part of their annual fees or some may bill you separately.

They should also provide an 'End of Year Returns' service completing the required P60's, P35's and P14's all of which are essential for the Inland Revenue.

Some accountants may charge for this service separately.

Not all of them will be able to offer a payment solution so this may have to be done separately.

4. Manually using tax tables and P11 form.

The Inland Revenue provides all registered businesses with relevant Tax Table and documentation for calculation of Payroll.

This includes all the relevant updates for changes to legislation, which the employer will have to keep up to date with.

The P11 form is specifically provided for this purpose and can be obtained from either the Inland Revenue directly or from all good Business Stationers.

Companies have to register for PAYE before the Tax Tables will be sent to them.
Once again you will be responsible for the payment of staff and disbursement of Tax to the Inland Revenue by the 19th of each month.

This method of calculation is mainly suited to smaller companies, as it can be time consuming.

Whatever option you choose, you MUST ENSURE your Tax Year End Returns are and submitted in the agreed IR format and on time. If they are incorrect or late, it is you as the Employer that is liable for any fines.