Overcoming common payroll challenges and the benefits of outsourcing
Keeping on top of payroll poses a huge challenge for businesses of all shapes and sizes – which is why it is prudent to seek specialist advice and consider the benefits of outsourcing your payroll.
During the last 12 months, the payroll processes of many businesses have been complicated by the ever-changing rules and measures around pay – especially the complex arrangements for the Coronavirus Job Retention Scheme (CJRS).
Looking ahead, employers face many other payroll challenges, not least the introduction of the IR35 rules in April and the ongoing requirements of Auto Enrolment.
The legislation governing tax and National Insurance Contributions (NICs) is forever changing, as are the rules relating to the National Living Wage (NLW) and auto-enrolment pensions.
Changes such as these need to be carefully followed and taken into account when administering your payroll – particularly as failures to pay the National Minimum Wage or NLW, or make the correct level of contributions to workplace pensions, can attract substantial penalties.
Outsourcing your payroll
By outsourcing your payroll, you can free up your valuable time so you can focus on running your company.
The benefits of outsourcing include;
- Removing the stress of dealing with HMRC, Government departments and third parties
- It takes away the time consuming, stressful and costly tier of payroll administration within your business.
- It is secure and confidential in line with the General Data Protection Regulation (GDPR)
- You’ll have constant cover, which means there are no problems if a member of staff is on holiday or absent
- If a scheme such as the CJRS or IR35 is implemented, you don’t need to worry – we can handle the implementation of this within your business so you can focus on the day-to-day running of your firm
IR35, or off-payroll working rules, are set to be enforced in the private sector from 6 April 2021.
The introduction of the IR35 legislation to the private sector, following its delay in April last year, will mean that in most cases the engager (employer) will be responsible for deciding whether to deduct tax and National Insurance Contribution (NICs) from freelancers and contractors, operating via a Personal Service Company (PSC), as if they were employees.
The new rules do not affect small businesses, as long as they meet two or more of the following criteria:
- Annual turnover is no more than £10.2 million
- A balance sheet total of no more than £5.1 million
- No more than 50 employees
The rules are complex and both engagers and contractors must be prepared for their implementation at the start of the new tax year.
Coronavirus Job Retention Scheme
The CJRS was introduced in Spring 2020 to help mitigate the impact of the coronavirus on businesses, enabling them to furlough employees with the Government covering 80 per cent of their wages up to a cap of £2,500 per month.
The scheme has undergone many changes over the past 11 months but is currently set to conclude at the end of April 2021, though further details on this may be announced in the Budget on 3 March.
This has seen a significant increase in the amount of work many businesses’ payroll teams have had to undertake, and for many, it may have been overwhelming.
At Seymour Taylor, our expert team can take the pressure away from you and allow you to focus on the important things in your business by assisting with furlough claims to ensure that you’re prepared – whatever happens.
We’re here to help
If you’re struggling to stay on top of your payroll, there is a better way. Whatever the size of your payroll, our expert team at Seymour Taylor are here to help you.
We can deal with any changes in payroll regulations and thresholds on your behalf and we also offer comprehensive support for auto-enrolment pension schemes.
Contact our expert payroll team at Seymour Taylor today to find out how we can support your business with payroll management Steve.firstname.lastname@example.org or call 01494 552100.
This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at the time of publishing 2nd March 2021.