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Take a moment, wherever you are, and imagine the feeling of sand beneath your feet, the smell of a new car, or the turn of a key in the door to your new house. Now, snap back to reality for a moment.
The majority of people are sure to be saving for, or at least considering, a big purchase. Not to mention the fact that everybody needs a regular income each month to cover day-to-day bills and living costs.
This need to earn money is also the reason why a correctly set-up and managed payroll procedure is important in contributing towards the successful management of a business, and the happiness of its employees.
Payroll refers to a company's list of employees that need to get paid, how much they need to get paid, and when they need to get paid. It deals with PAYE (Pay As You Earn) – a specific facet within payroll that calculates tax and NICs (National Insurance Contributions) – and applies this to an employee's payslip. It is also the area of bookkeeping that deals with Auto Enrolment and pension contributions, as well as the handling of P45s, P46s, and P60s when they are required.
For each of these, payroll then has to communicate any changes and deductions to HMRC through the RTI (Real Time Information) service, along with any related employee and company reports.
Did you know? You have to keep your payroll records for three years from the end of the current tax year. Failure to do so can result in your company receiving an unwanted fine from HMRC.
If you are a sole trader (and the only person in the business) then payroll needn't be a worry. This is because legally a self-employed worker and their business are one and the same. However, if you're a sole trader with an employee (or employees) then payroll becomes a necessity.
In the case of a limited company, payroll is always necessary – unless there are no employees and if the directors and owners don't receive a salary. This is because a limited company, no matter the size, is a separate legal entity to its employees, directors, and its owners.
Essentially, the payroll process needs to start as soon as your company begins taking on employees. This can be a complicated process for some people to get their heads around, particularly when they are already contending with managing a company.
AMR Bookkeeping Solutions offers a hassle-free answer to this that lets you focus on what's important – your business. With years of experience and unparalleled expertise, you can outsource all your payroll needs with confidence in a cost-effective and time-efficient way. Get in contact with our friendly team now to find out how we can help you.