As an accountancy firm, our clients rely on us to provide them with expert advice on all areas of their business, including payroll. Payroll is a crucial function for any business, as it ensures that employees are paid correctly and on time. However, it is also an area that is subject to frequent changes in legislation and regulations.
In this blog post, we will discuss the key updates to UK payroll legislation in recent years and provide you with some compliance tips to help you stay on top of your responsibilities.
National Living Wage (NLW)
The National Living Wage (NLW) is the minimum wage that all employees aged 23 and over must be paid. The NLW has been increasing in recent years, and it is now set at £10.42 per hour. This means that employers must ensure that they are paying their employees a minimum of £10.42 per hour for all hours that they work. The National Minimal Wage (NMW) is also increasing on 1 April 2024 to 11.44 per hour.
Universal Credit
Universal Credit is a new benefit system that is gradually replacing all other means-tested benefits. Universal Credit is paid in a single monthly payment, and it is based on your income and circumstances. This means that employers may need to make changes to their payroll processes to accommodate Universal Credit.
HMRC PAYE Online
HMRC PAYE Online is the online system that employers use to submit their payroll information. The system has been updated in recent years to make it more user-friendly and efficient. However, it is important to ensure that you are familiar with the latest changes to the system to avoid making mistakes.
Payroll errors
Making mistakes in payroll can be costly and time-consuming to rectify. Some common payroll errors include:
- Paying employees too much or too little
- Failing to deduct taxes or national insurance contributions
- Failing to submit payroll information to HMRC on time
To avoid these errors, it is important to have a robust payroll system in place and to regularly review your payroll processes. You should also make sure that you have the correct payroll software and that you are using it correctly. We can help you with this, and if you’re looking for further reading about Payroll Processing Benefits for Accountancy Firms, you can read our blog.
Payroll compliance tips
Here are some compliance tips to help you stay on top of your payroll responsibilities:
- Stay up-to-date with the latest tax and National Insurance contributions rates.
- Regularly review your payroll processes to ensure that they are compliant with the latest regulations.
- Use payroll software to automate your payroll processes and reduce the risk of errors.
- Submit your payroll information to HMRC on time and in full.
- Keep detailed records of your payroll transactions.
- Seek professional advice from us if you have any concerns about your payroll compliance.
By following these tips, you can help to ensure that your business is compliant with all applicable payroll regulations. This will help you to avoid penalties and protect your business from legal action.
Contact us
We are here to help you stay on top of your payroll responsibilities. Contact us today to discuss how we can help.
Alistair Allcock
Alistair AllcockAli has a wide range of experience within the accounts and audit areas, drawing on his experiences from working for both large and mid-tiered practices. Find out more about Ali here.