Are you managing a limited company?

Do you have employees?

If your answers are “yes”, you should probably be using a PAYE payroll system.

Some limited companies have just one employee – the company director – however they still qualify for PAYE (Pay As You Earn) if they earn £123 or more a week (£533 a month or £6,396 a year).

Running an efficient payroll system doesn’t need to be complicated! Here are the basic aspects involved for most limited companies:

1. Payments are made to HMRC as well as employees, including:

• Income tax
• Class 1A National Insurance Contributions for benefits in kind (for perks in addition to salary, such as personal use of a company car)
• National Insurance Contributions (NIC)

2. Other payments such as statutory sick pay, statutory maternity/paternity pay and contracts for employees must be considered.

3. Employees should be auto enrolled to your workplace pension scheme. This can be postponed for the first three months and employees can choose to opt out once they are enrolled. This involves paying a percentage of each employee’s pay into your workplace pension scheme. Your company may also make a contribution. All pension contributions are paid to the pension company that your limited company uses.

4. As an employer, it is your legal obligation to provide each employee with a payslip. The details to include are:

• earnings before and after any deductions,
• the amount of any deductions that may change each payday, for example tax and National Insurance, and
• the number of hours worked, if pay varies depending on time worked.

5. There are software solutions available to help you manage your payroll efficiently and provide necessary information to employees. At Spicer & Co Chartered Accountants, we use BrightPay Connect. This online portal enables employees to access their documents, such as payslips and P60. Employers can also access all the information they need electronically. You use it to manage auto-enrolment and holiday requests too.

Hopefully these pointers clarify your payroll obligations as an employer.

Some limited company managers prefer the privacy and control of running their payroll in-house. For others, the time, details and compliance involved make outsourcing their payroll the best way forward.

“Many of our clients appreciate the peace of mind that comes with a timely, accurate payroll service,” says Suzanne Spicer of Spicer & Co. Chartered Accountants. “We literally live and breathe payroll management! This means we are fully aware of the compliance issues and deadlines involved. We love to take the admin headache away from limited company managers, saving them time and stress.”

Would you value the convenience and reassurance of outsourcing your payroll?

Perhaps you need someone who understands the nuances of the Construction Industry Scheme (CIS) as well as payroll?

Contact the friendly experts at Spicer & co Chartered Accountants in Dunstable. We cut through the jargon of accounting and bookkeeping and especially enjoy helping limited company managers. Let’s have an informal discussion without obligation.