As an employer in the UK, running payroll can seem like a daunting task, especially if you're new to it. However, with the right guidance, you can ensure that you're meeting your obligations and avoiding any potential penalties. In this article, we'll take you through the key steps involved in running UK payroll, from registration to reporting and paying HMRC.
Before you can start running payroll, you need to register for PAYE (Pay As You Earn) with HMRC. You'll need to do this if you're employing staff, including directors, and paying them above the PAYE threshold. You can register online or by phone, and you'll need to provide some basic information about your business and employees.
When running payroll, you'll need to record employee pay and make the necessary deductions. This includes:
You'll also need to provide employees with payslips, which should include details of their pay and deductions.
You'll need to report employee pay and deductions to HMRC on a regular basis. This is typically done through the Full Payment Submission (FPS), which is usually submitted on or before payday. You'll also need to submit an Employer Payment Summary (EPS) if you need to report any reductions to your PAYE payment.
You'll need to pay HMRC the amount you owe, which is usually done through a bank transfer or online payment. You can choose to make quarterly payments, which can help spread the cost throughout the year.
Make sure to keep accurate and up-to-date records, as you'll need these to complete your annual reports.
If you're a small employer, you may be eligible for certain concessions, such as quarterly payments.
Don't forget to view what you owe and send an EPS if necessary.
Late reporting can result in penalties, so make sure to submit your FPS and EPS on time.
Running UK payroll may seem complex, but by following these steps and staying on top of your obligations, you can ensure that you're meeting your requirements and avoiding any potential penalties. Remember to stay organized, keep accurate records, and seek help if you need it. With this guide, you'll be well on your way to running a successful and compliant payroll.
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