We were recently asked what the benefits are of working with a local payroll bureau. This got us thinking that this is probably not common knowledge and we’ve decided to go into a little more detail. But, before we do that, another question also springs to mind. Why choose a payroll bureau in Kent, for example, over a payroll bureau in Manchester? Besides being a million miles away, a professional payroll bureau should have the ability to offer a nationwide service. Have a look at our opinion below:
Payroll is a necessary function for all businesses because without an accurate payroll, employee morale will be affected. As a result, the business will ultimately suffer. Whether you have your own in-house payroll software or use a local Payroll Bureau, there is no way of escaping this critical function. In addition, it is essential to select a managed services provider that meets industry standards such as the CIPP accreditation and BACS accreditation.
As we have previously mentioned, the cost of running payroll in house is substantially higher compared to a fully outsourced payroll solution. The outsourced service provider will bear the cost and invest in functional payroll software. It is the Bureau Software that makes all the difference. Bureau software should provide online, GDPR compliant, portals whereby information can be transferred securely from bureau to client and vice versa. So, technically speaking, everything can really be done remotely. Bureaux will often provide a point of contact or account manager that you can call if any issues arise.
You would rarely need to meet your account manager face to face. But working with a local payroll bureau will give you that opportunity. Meeting with your payroll account manager will depend solely on the complexity of your payroll. If you have a complex payroll that requires frequent changes, such as weekly as well as monthly pay runs, we would highly recommend using a local payroll bureau.
We provide a fully outsourced payroll solution that is designed to save you time and money. Our service is mostly communicated remotely either via our Bureau software or over the phone. In other words, no matter where you are located within the UK, we will design a bespoke solution for you and efficiently communicate as well as guide you through the process.
Over the years, MP Payroll Solutions have provided outsourced payroll services to hundreds of companies within the UK. We have a lot of experience in determining payroll errors in small businesses and how to resolve them. The aim of this post is to help businesses avoid the 7 Payroll Pitfalls. From our point of view, it seems like SME businesses make the following critical payroll mistakes:
The lack of technical payroll knowledge is a common concern. For instance, payroll personnel that are unfamiliar with the in-house payroll system will result in payroll mistakes. Therefore, adequate training or outsourcing your payroll will eliminate any critical payroll mistake.
HMRC requires employers to submit period payroll files, specifically RTI, and account for tax as well as national insurance at source. All too often this doesn’t happen and as a result, employers end up in arrears with statutory payments. Employers can also download tax code notices directly from HMRC and this too gets missed. As a result, you may get disgruntled employees, as they end up underpaying tax.
There is always HMRC legislation to consider and ensuring that any changes are implemented in a timely manner. Failure to implement can have severe ramifications. In addition, with the arrival of GDPR, it’s important that employers remain compliant with the latest GDPR requirements. As a result of GDPR non-compliance, legal action may be taken.
It’s common for small companies to not back up their payroll IT systems because it’s expensive. Therefore, any payroll system issues will be extremely difficult to resolve. Backups of any payroll system should be both backed up onsite as well as offsite.
What are the arrangements for continuing business in the event of a fire or other disaster? What happens if systems go down or payroll personnel suddenly leave? A contingency plan will help prevent any of these scenarios from becoming reality.
Small business underestimate the total start-up cost to set up, as well as run, a payroll in-house. The technical infrastructure is expensive and training staff can also be costly. Read: How much does outsourced payroll cost? In addition, making these critical payroll mistakes will result in costly fines that can cripple a small business.
Often, payroll is a standalone function and they find themselves pulled between finance and HR. This makes life difficult for the payroll function and as a result, leads to staff being confused and even demoralised. Be clear where payroll sits within your organisation and who, if anyone, they report to.
You won’t have to avoid the 7 Payroll Pitfalls if you Outsource your payroll to MP Payroll Solution! All of the above problems disappear because MP Payroll Solutions is CIPP (PAS) Accredited. Therefore, we have all the above areas covered with full procedures in place for dealing with all of the issues a payroll office can face.
Time needed: 2 days, 3 hours and 30 minutes.
As a Payroll Bureau, a very common question we get asked is “How much does outsourced payroll cost?”. This generally gets asked during the sales process as potential clients want some type of price indication.
So, the best person to answer this question is our very own Sales Manager, Mr Dave Williams. View Dave’s response below:
This question is often one of the first questions potential customers ask. I always mention to clients that there’s a few factors to consider before a bespoke quotation can be provided. These are the factors or steps I discuss with potential clients:
We need to know how many employees are being paid per payrun in order to gauge how complex your payroll could be. Some companies could have 1 to 10 employees with few complexities while others have hundreds of employees who all have different rates of pay and accompanying schemes. We apply a discount scheme for companies that are growing. Therefore, the more employees the smaller the cost per employee.
We must discuss the current complexity of your payroll in order to see what we can improve. Establishing the outsourced payroll cost depends on this factor. In our experience, companies can either have a straightforward or a very complex payroll. A straightforward payroll, for example, could consist of a few static Directors who’s pay never changes. A complex payroll, for example, could consist of lots of departments and cost codes, who are hourly paid, that need payment on different days throughout the month.
Each business is different. Therefore, it’s important to understand each company, their rules and current schemes to comfortably run their payroll. We must also establish the best way for clients to collate this information because payroll data must be securely transferred every month between the client and payroll provider. In other words, the complexity of your payroll will have an impact on the cost.
Determining the frequency of pay is critical when providing a cost because it’ll determine whether we run 12, 24 or 52 pay runs per year. Typically, staff that are paid weekly tend to have hourly pay rates. Companies can ask for a very quick turnaround on their payroll in order to get staff paid promptly. For instance, clients may need a 1-hour payroll turnaround on a Friday afternoon so that staff get paid in the same week that they’ve worked. There’s a big workload difference between running payroll 12 or 52 times a year and pricing would be affected.
We must ascertain the quickest, most secure and efficient way of getting payroll changes. For example, hours worked, starters, leavers, bonuses, salary adjustments and absence information must be sent by the client to us. The most efficient way to retrieve, as well as deliver, this information is by using software that can produce a spreadsheet. This is the quickest way to get accurate information transferred from the client to the payroll provider.
Auto enrolment is a value added service which ensures you are compliant with the Pension Regulator. In addition, I investigate what bespoke management reports are required. Reports such as Nominal Journals or General Ledgers are generally requested however there are many alternative options available. These reports can also be imported straight into the client’s accounting or finance software. Processing of P11D’s, if you have any taxable expenses that need processing and reporting, is also part of the value added services.
In conclusion, your outsourced payroll cost will differ depending on your business requirements. In a bespoke quotation, there’s no set fee however the steps highlighted above will help you understand how your payroll cost is calculated.
Two days to go until the P11D deadline, which is on the 6th of July 2019. So, it’s not too late for you to meet the deadline. By law, at the end of each tax year, HMRC must be provided with details of expenses, benefits as well as facilities provided to your employees and directors during the tax year.
Don’t forget that since 6 April 2016, dispensations are no longer available. However, you can still apply for an exemption and avoid the need for reporting on business travel, business entertainment expenses, phone bills, uniforms as well as work tools. Therefore, it’s in your best interest to get this done.
In order to qualify for an exemption, you must be:
Currently, you don’t need to apply for an exemption if you’re paying the HMRC’s benchmark rates for allowable expenses. HMRC states that you must also have a system in place to check the benchmark or special rate payments.
Also, your employees aren’t allowed to check their own expenses, therefore someone else within your company needs to do this to make sure they’re legitimate. Tell employees to keep proof of their expenses, for example receipts or bills, in case you need to check them.
Another option is the payrolling benefits and expenses, in order to remove the necessity of providing P11D’s. Again, well worth thinking about to relieve the stress of the annual P11D rush as well as the cost!
In order to take advantage of this facility you must register with HMRC before the start of the tax year you want to payroll the benefits for.
If you need any assistance, contact MP Payroll Solutions and we’ll happily assist you.
Outsourcing ones’ payroll is always a difficult decision. There’re so many considerations to keep in mind when undergoing the selection of a payroll service provider. We’ve identified 4 easy steps, to answer the popular question of “How does Outsourced Payroll Work?”. See our steps below:
As a company you must decide on the type of payroll provider required. For example, payroll only, payroll and HR, a big name, an accountant, a multi service solution covering HR, accountancy, tax advice as well as auditing.
The selection process previously undertaken would’ve involved research. Identifying several payroll companies that match your needs, will help you make a more informed decision. Therefore, we recommend sourcing at least 6 different providers. After that, compare the fees, service levels and most importantly, take into consideration the provider that best matches your needs. During the process, you must ask to view references, financials, their business profile (for example, a company house search), gain an insight into their client base, look at staff turnover, as well as view their contingency and disaster recovery arrangement.
Once you’ve selected a provider, you’d have to sign a payroll contract which would lay out the terms and conditions. Pay close attention to termination clauses, service levels (for instance, clauses covering poor service/relationship breakdown) as well as indemnities in the event of systems failures, fires, etc. Once the contract has been agreed, it would be the providers turn to audit your company. They would seek to identify and satisfy their money laundering requirements. Documents such as copies of passports, utility bills, driving licences, bank statements will be required from all directors.
Subject to the money laundering checks being successful, your new provider would then look to set-up a payroll process which is likely to consist of multiple stages.
In summary, the payroll process requires you to send confidential information to the provider in order to start the process. Ideally, a secure, GDPR compliant, portal should be used to transfer confidential information from the client to the provider.
In conclusion, “How does Outsourced Payroll Work?” is a popular question asked by business decision makers, and rightfully so. The above steps will help you understand the process in order to successfully outsource your payroll to a trusted provider. Contact us for more information.
West Kent Mind | Mental Health Charity
We are proud to announce that MP Payroll Solutions will be supporting this charity throughout the year. We have selected this local charity because there is no better feeling than giving back to a great cause. Our aim is to raise funds through various events in order to support West Kent Mind. We challenge other local brands to support a local charity and drive awareness for the positive work they do.
Mind is the leading mental health charity in England as well as Wales. West Kent Mind began as the Sevenoaks and District Association for Mental Health (SDAMH) in 1962. It was one of the first local associations to affiliate to national Mind (then known as the National Association for Mental Health) in 1964. SDAMH became Sevenoaks Area Mind in 2005, and became West Kent Mind in 2015. As part of their 50th Anniversary celebrations in 2013/14, West Kent Mind interviewed some of the early pioneers and compiled this history of the charity
Staying well: Support people likely to develop mental health problems, to stay well.
Empowering choice: Empower people who experience a mental health problem to make informed choices about how they live and recover.
Improving services and support: Ensure people get the right services and support at the right time to help their recovery and enable them to live with their mental health problem.
Enabling social participation: Open the doors to people with experience of mental health problems participating fully in society.
Removing inequality of opportunity: Gain equality of treatment for people who experience both mental health and other forms of discrimination.
Organisational excellence: Make the most of our assets by building a culture of excellence.
In conclusion, we are excited about this partnership and challenge other local businesses to give their support a local charity such as West Kent Mind.
Smart Pension was founded specifically to support UK businesses faced with the challenges of auto enrolment. Since 2014, Smart has evolved its proposition to offer unique solutions from pensions to platforms, suiting the needs of companies domestically and internationally. Today the company is one of the largest providers of workplace pensions in the UK.
They are confident that they can offer businesses a scheme that is the best value for you and your employees. Their relationship-orientated service enables them to deliver good member outcomes, offering members and employers not only peace of mind but also an efficient transition process.
All of this is possible thanks to an innovative approach to technology in the workplace pension industry, which has attracted large investments from global giants such as J.P. Morgan and Legal & General. This approach has also won them many prestigious industry awards. Most recently, they took home three trophies at the UK Pension Awards including DC Master Trust of the Year, DC Innovation of the Year as well as Retirement Innovation of the Year.
Smart Pension is on a mission to transform pensions, savings as well as financial well-being, across all generations around the world.
The auto enrolment process is also a component of our Outsourced Payroll Service. MP Payroll Solutions takes over the auto enrolment process for you in order to save you time. In other words, our goal is to free up your staff members so that they can concentrate on core business activities. Whether you’re a start-up, SME or large corporation, every employee is required by law to have a pension. Please note, MP Payroll Solutions cannot provide you with advice when selecting a pension provider.
In conclusion, it is a requirement to enrol your employees into a qualifying pension scheme of your choice. MP Payroll can save you time as well as money by enrolling your staff for you.
Firstly, what is the Executive Pay Gap report? This means the UK’s biggest listed companies must now justify the gap between senior executives and their staff. In other words, businesses will have to justify the difference between senior executive salaries and average annual pay for employees. This is different to the Gender Pay Gap reporting because Executive Pay reports on seniority and not gender. This forms part of the government’s plan to improve transparency around senior executives’ remuneration. MPs also hit out at companies for failing to pay the living wage to its lowest-paid workers. Secondly, will this affect you as well as your business? The below 3 points will give you clarity.
As mentioned above, this report will divulge how much Senior Executives from UK’s biggest listed companies earn compared to their employees. This will not only include their remuneration but also bonus payments as well as share-based incentives.
No. According to GOV.UK, this report is only applicable to Senior executives in companies that have more than 250 employees within the UK.
The Executive Pay Gap reporting was implemented in January 2019 however, figures will only be released in 2020. Remuneration of executives will be under the microscope.
In conclusion, 360 Law Group say that the concept of reporting on executive pay may seem somewhat straightforward. However, in practice, employers could encounter several problems along the way. Firstly, the nature of executive pay differs greatly to that of the average employee. With the legal obligation to include bonus payments as well as share-based incentives, the calculation could become complicated. What’s more, companies will also be required by the new regulations to report on full-time-equivalent pay for the UK workforce. In other words, employers who outsource certain functions or take independent contractors may have inaccurate results between the highest and lowest paid employees.
We are a specialized BACS Approved Payroll Bureau with 15 years’ experience of processing payroll for clients in a variety of business sectors.