
There’s a danger that first-time business owners imagine payroll to be a simple matter of getting their workers’ money to them on time and accurately. In fact, payroll encompasses a dizzying array of factors: everything from hiring and firing, salary, leave dates, benefits, expenses, commissions, bonuses, pension enrolment – to mention just a few.
With so many potential pitfalls to avoid, you might think that keeping compliant would be an almost impossible task. Yet it must be remembered that legislation isn’t designed to catch companies out. By following a few simple steps business owners can ensure that they protect themselves from the penalties of non-compliance, while keeping employees content by getting them paid regularly and accurately.Keep effective audit trails
Keeping an effective audit is the single best way that businesses can stay within the bounds of the law. Mistakes can happen to anyone; but when they do, an audit trail will enable investigators to check information so they can distinguish genuine errors from fraudulent transactions. An audit trail enables business owners, accountants and auditors to examine every change that has been made to each employees’ information. The subsequent report will show when there have been changes to tax codes, hours worked, overtime, and any other factor that affects their pay. Crucially, it will also show who is responsible for making those changes. Audit trails are an incredibly useful tool for protecting your business and your reputation in the event of an investigation, because it enables you to link each transaction with supporting information – such as invoices or purchase orders – that will validate an unusual-looking payment.Real-time information
“Tax doesn’t have to be taxing!” claims HMRC, but many approach their annual tax return with trepidation. For business owners, the consequences of missing tax deadlines can be severe – up to and including the threat of being struck from the Companies Register. This process was further complicated with the advent of Real Time Information (RTI), the most significant single change ever made to PAYE. Although RTI represents a new and improved way of reporting, it does require employers to submit information to HMRC in real time, every time they pay employees – rather than just at payroll year end. Help, however, is at hand for those companies that have automated full payment submission (FPS) built into payroll software. This generates the required reports and automatically submits your payroll information online to HMRC, saving valuable time. Read more from our payroll focus:- Pensions and payroll – A single entity for growing SMEs
- Payroll: Get it right, or risk losing business talent
- Making payroll more efficient through adaption and improvement
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