Setting up a payroll system: what you need to know
Your business has been going from strength to strength and it’s time to hire staff to help take on some of the work to help you meet your clients’ needs and fulfil the orders you have coming in. It’s an exciting time as it means that you are ready to grow the business. It can be a little daunting though if you have not done this before, and your legal obligations will change as you take on more and different responsibilities; you will now be an employer and will need to consider all the legalities that come with that.
One of these is setting up a payroll system. It is possible to do this yourself, but there are a number of benefits to outsourcing it to a specialist who can guide you through a process which, more likely than not, is completely new to you. These benefits include:
Dealing with HMRC
When you become an employer you must register with HM Revenue & Customs and set up for Pay As You Earn (PAYE) Online. A specialist can manage that on your behalf as well as operate the PAYE system for you. This will involve arranging for the right software to record and manage PAYE which will need to be compatible with HMRC’s systems. A payroll specialist will already have this set up saving you time and effort in finding the right system for your business.
Registration with HMRC will also require certain employee details to be collected and filed. This could be a time-consuming task and rather than spend your time away from clients doing it a specialist will manage it all for you.
Setting up the necessary systems
These include managing new employees, as well as having a system in place for those employees who may choose to move on at some point. It also includes things such as sick pay, maternity, paternity, and adoption pay, determining how expenses will be managed, as well as bonuses, commission, and taxable benefits – for example company cars, health insurance, etc. They will also have the necessary security systems in place to keep records confidential and guard against potential identity fraud or data breaches.
Keep up to date with the law
A specialist will be on top of the current legislation that affects employers and will also keep up to date with any changes that may coming in or which are proposed. They can then advise you on what you need to do or what your options may be.
Be prepared for anything
As an employer you will need to have contingency systems in place to make sure that your employees are paid on time and that the necessary records are filed with HMRC, or you could be penalised. Leave that to your payroll specialist and you have one less thing to worry about.
The use of payroll systems will also generate information to help you with management planning. Again, doing this yourself will take you away from the day-to-day running of your business and a specialist can do it for you. They will also have experience of what is important for small businesses in terms of business planning and can advise accordingly.
If you would like to find out more about payroll systems and how a specialist can add value to your business, talk to us at Bells Inc. Hamilton Stewart. On the end of a phone on 020 8763 1711 or on email at we are here to guide, advise, and assist you to manage and grow your business.