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Here are 10 Accounting payroll processes that can help businesses streamline operations and stay compliant with UK payroll regulations:
1. Real-Time Information (RTI) Submission
Submit payroll data to HMRC every time employees are paid.
Ensures accurate and timely reporting of PAYE, NICs, and other deductions.
Use HMRC-accredited software for RTI compliance.
2. PAYE Setup and Management
Register with HMRC as an employer to operate PAYE.
Deduct Income Tax and National Insurance Contributions (NICs) directly from employees’ wages.
Keep records for at least 3 years.
3. Auto-Enrolment for Workplace Pensions
Assess employees for eligibility and enroll them in a workplace pension scheme.
Ensure minimum contributions are made by both the employer and employees.
Submit pension contributions to the chosen provider regularly.
4. Payroll Tax Codes Management
Use the correct tax codes to calculate employees’ PAYE and NICs.
Update tax codes as advised by HMRC to prevent over/underpayments.
Issue employees with P60s at the end of the tax year.
5. Statutory Payments
Manage statutory pay entitlements, such as:
Statutory Sick Pay (SSP)
Statutory Maternity Pay (SMP)
Statutory Paternity Pay (SPP)
Shared Parental Pay (ShPP)
Adoption Pay (SAP)
Ensure payments comply with government rates and rules.
6. National Minimum and Living Wage Compliance
Regularly review employee pay rates to meet the UK’s National Minimum Wage (NMW) and National Living Wage (NLW) requirements.
Adjust pay rates as the government updates thresholds annually.
7. Employment Allowance Claim
Claim Employment Allowance to reduce employer Class 1 NICs liability.
Check eligibility criteria annually to ensure you can continue to claim.
8. Expense and Benefits Reporting
Record and report taxable benefits and expenses provided to employees.
Submit a P11D form to HMRC for each relevant employee.
Pay Class 1A NICs on the taxable value of benefits.
9. End-of-Year Payroll Processes
Finalise payroll for the tax year by submitting a Full Payment Submission (FPS) marked as the final submission.
Issue P60 forms to all employees by the statutory deadline (31 May).
Prepare and submit P11D and P11D(b) forms for benefits and expenses.
10. Payroll Recordkeeping
Maintain accurate payroll records for each employee, including:
Hours worked
Tax and NICs deductions
Statutory payments
Pension contributions
Store records securely for at least 3 years, as required by HMRC.
Bonus Tip: Outsourcing Payroll Services
Consider outsourcing payroll to a professional accounting service to save time, reduce errors, and stay compliant with all regulations.
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