Register as an Employer with HMRC:
Before paying employees, you need to register with HMRC to operate PAYE (Pay As You Earn). This should be done at least four weeks before your employees’ first pay day. After registration, you will receive a PAYE reference number and other relevant identifiers
Set Up Payroll Software:
Choose HMRC-recognised payroll software that automates the process of calculating wages, deductions, and tax reporting. This software should comply with Real-Time Information (RTI) requirements, enabling you to submit payroll details electronically to HMRC
Input Employee Information:
For each employee, enter relevant details into your payroll system, including:
Full name, address, and date of birth
National Insurance number
Tax code (available on their P45 or through an HMRC starter checklist)
Employment start date and salary
Any applicable deductions like pensions or student loan repayments
Calculate Gross Pay and Deductions:
Calculate each employee’s gross pay based on their hourly rate or salary. From this, you will need to deduct:
Income Tax
National Insurance contributions
Pension contributions (if applicable)
Any additional deductions (like student loans or benefits)
Generate Payslips:
Before or on the payday, issue payslips that clearly display gross pay, deductions, and net pay. This is a legal requirement in the UK
Report to HMRC:
Submit a Full Payment Submission (FPS) to HMRC every time you run payroll, notifying them of any payments and deductions made for each employee
Ensure you do this on or before the employees’ payday to remain compliant and avoid penalties.
Send an EPS instead of an FPS if you’ve not paid any employees in a tax month or if you:
reclaim statutory maternity, paternity, adoption, neonatal care, parental bereavement or shared parental payments
claim the Employment Allowance – do this once each tax year
can reclaim Construction Industry Scheme (CIS) deductions as a limited company
Pay HMRC:
Pay the collected tax and National Insurance contributions to HMRC by the 22nd of the following month (or earlier if paying by post). If you’re a small employer that expects to pay less than £1,500 a month, you may arrange to make payments quarterly
Additional Compliance Considerations
Maintain Records: Keep accurate payroll records for at least three years. This includes employee payslips, tax records, and details of deductions to comply with HMRC regulations
Review Annually:
At the end of the tax year, complete your year-end reporting to HMRC.
Let me introduce myself…
I am your local accountant, the sole Director of the practice and my name is Sonya Jolly.
I qualified as a chartered certified accountant in 2000 and have over 20 years of general practice experience.
I have always worked with small owner-managed businesses and individuals.
I feel my approach allows me to develop lasting relationships with clients, providing them with all their accountancy and taxation needs and requirements.
I like to get to know my clients well and to take the time to learn about all areas of their businesses, resulting in more tailored taxation and financial advice.
I want to offer my service as a Micro-Financial Director within small owner managed businesses within the North-West.
You may not think you can afford such a service but it is easily affordable when this means that you can use your time more effectively.
Do what you do best and let me concentrate on the financial and administrative side.
