Payroll

The one job with a deadline every month and a person on the other end

Payroll is different from the rest of the work here in one specific way. Every deadline in this practice is statutory and none of them move, but the others are owed to HMRC or to Companies House. This one is owed to a person. People are paid on a date they have arranged their own lives around, and a payroll that is late is not a compliance problem first, it is somebody wondering whether their rent is going out.

So payroll runs to the cycle the business actually pays on, weekly, fortnightly or monthly, and the reporting to HMRC goes with it. Real Time Information means a submission on or before each payment rather than a return at the end of the year, so the discipline is built into the month whether or not anyone is watching.

Our payroll services are built for small employers, from a single director on the payroll up to businesses of around twenty people, which is where the work is close enough that somebody notices immediately if a payslip is wrong. Sibo is trained in payroll and payroll processing is handled in-house, rather than passed to a bureau. That is why the payroll figures agree with the bookkeeping rather than arriving as a separate set of numbers to be reconciled later.

PAYE balances that have never been agreed to HMRC

This is what we look for first on a payroll we are taking over. Another common issue is payroll control accounts, including PAYE, National Insurance and net wages, that have not been properly recorded or reconciled in the accounts.

The payroll software knows what it thinks you owe. HMRC's account knows what it thinks you owe. Nobody is automatically comparing the two. Where they have drifted, it is usually for a mundane reason: a payment allocated to the wrong period, an adjustment made in the software after the submission went, a correction that was processed one side but not the other. The balance sits there being wrong, and it stays wrong until either somebody reconciles it or HMRC writes to ask about it.

Reconciling PAYE to HMRC is not glamorous and it is not usually what a business thinks it is buying when it buys payroll. It is the difference between a payroll that is processed and a payroll that is correct.

Statutory pay, starters, leavers and the awkward months

Ordinary months are easy. What actually takes the time is the month with something in it: a new starter with a P45 that has not arrived, a leaver in the middle of a period, Statutory Maternity Pay, Statutory Sick Pay, a student loan starting, an attachment of earnings.

These are the points where payroll goes wrong, and they are exactly the points where an employee notices. We handle starters and leavers, the year-end P60s, P11D forms where they are needed, and the statutory payments as they arise. Where entitlement depends on the circumstances, and with statutory pay it usually does, we will tell you what the conditions are rather than assume.

Pensions: what we do, and what we do not

We calculate and process pension deductions and submit the pension schedules to your provider. That is processing, and it is what auto-enrolment needs doing every period.

We do not provide pension advice, and this is a boundary worth stating plainly rather than leaving you to discover. Advice on schemes, contributions or what anybody should do with their pension is regulated work and it is not what this practice provides. If that is what you need, we will say so and point you toward somebody who does it properly. What we can do is implement your pension adviser's instructions through payroll and bookkeeping, which is where they have to end up anyway.

When a payroll question turns into an employment law question

Payroll questions have a habit of turning into employment questions halfway through. Somebody asks how to process a final payment and the real question is what notice they should have had.

Employment law is outside what this practice advises on, and we say so rather than guess. Where a question falls outside our accounting and payroll scope we will point you to the right place, such as Acas or an employment law specialist, and once you have the answer we will make sure payroll reflects it.

Payroll that agrees with everything else

Payroll does not sit on its own. The wages figure lands in the profit and loss, the PAYE liability sits on the balance sheet, and both have to agree with what was actually paid. Where payroll is run by one party and the bookkeeping by another with nobody reconciling between them, the year end is where the gap turns up.

If you are in construction and paying subcontractors as well as employees, those are two separate regimes running side by side and the deductions are not interchangeable. That is the CIS work, and getting the boundary between the two right matters more than either one taken alone.