Agent, Accountant & Adviser TO Tax Payers

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Payroll is a vital and recurring administrative process for the small business employer.

There is the obvious responsibility of correctly paying the company’s employees on time each, and every week or month.

Aside from this, the small employer is liable to pay over to the collector of taxes, either monthly or quarterly, dependent on the relative size of the employer payments due, those deductions of tax and national insurance suffered by its employees.

This is in addition to the employer’s national insurance liability based on the amount of total gross pay paid to its employees. These rates of tax and respective national insurance contributions can reasonably be expected to change annually, and sometimes even more frequently.

The small employer is also likely to have to take into account holiday pay for its employees, and any payments in lieu, statutory sick pay, statutory maternity & paternity leave and pay, adoption leave and pay, shared parental leave, any attachment of earnings required by e.g. a court order, plus relevant overtime calculations, and the list goes on.

On top of this, there is a range of taxable benefits that the employee may be receiving as part of their remuneration package, e.g. a company car, maybe with fuel available being used privately, private health care, beneficial loans at below bank of England base rate, financial help with child care, or even accommodation and/or utility bills.

The cash equivalent amount of each respective employee benefit, directors included, must be calculated and either factored into the tax code (the amount of free pay not subject to tax), or treated as additional gross pay, or ‘payrolled’.

On certain of the above-mentioned benefits, the small employer is liable to pay over to HM Revenue & Customs, Class 1A national insurance contributions, also applied to the computed cash equivalent benefit.

More recently, and topical right now, the employer has been ‘saddled’ with forming a work place pension, on or before its staging date (anytime now), and effectively administering it, heavily regulated by The Pensions Regulator.

This involves inherent additional cost to the small business, actually, of percentage-based employer pension contributions.

In principle to help-out the government.

All of the above, poses a headache for the small employer, which comes around ever so regularly, and nowadays, each and every
payday, HM Revenue & Customs statutorily, expect to receive a report reflecting this information.

I’m sure you didn’t go into business and to possibly want to take on staff, but then be faced with solving the other side of the employment equation.