Taking over my payroll from accountant

techguy81

I run a small business with two employees on the payroll. At the moment my accountant handles the payroll side of things because it was just another headache I didn't want to think about when I was starting up my business.

I have been told it is actually quite easy to manage your own payroll with the free HMRC software. In the interests of cutting costs and because of some rather poor service from my accountant recently I am thinking of giving it a go myself.

I am confident enough to set the software up, but before I start meddling, is there anything I need to tell or ask my accountant? Does anything need to be transferred etc?

Thanks.

Savvy_Sue

You'll need to tell HMRC that you are no longer using an agent, and it may take a while for this to filter through (I know that it took a LONG while after we changed agents for the new one to be able to log in to their systems!)

It is fairly easy to do it, but you need to be absolutely meticulous, so you might consider finding another agent, specifically to do your payroll, and get a better and cheaper service.

Thing is, if you're doing payroll yourself then you have to do it. You can't put it off because you're ill, on holiday, or flat out running your business. And in a good week or month there may not be so much to do, but in the month when one of your employees goes sick and the other asks for paternity / maternity / compassionate leave and you have to calculate everything from first principles, it's going to take a bit longer.

Plus a good payroll agent will ask the right questions to make sure you're on the right side of employment law: I emailed our service to say X was leaving and had taken 2 days' more leave than they were entitled to, and they emailed back to check that we had the right wording in our contract to enable us to deduct this from their final salary.

Downsides of using an agent is that you may need to factor in a little more time to get details of any changes to them, but you must be doing this with your accountant anyway, and you have to meet their deadlines, but ditto.

Mistral001

If you change from your accountant to yourself, you will have to do it all. You cannot go back to your accountant with odd query on payroll as you have effectively sacked them from this role.

I used to employ people and did it myself. I does take up quite some time and you need to set aside time for doing it. It is not rocket engineering but you do need to know the system and sometimes it can be infuriating when there is some little detail that you are missing. I found that I had to employ my accountant on a time basis to help me out on ocassions with payroll and it was money well spent in my view.

If I was taking on employees again, I would seriously consider getting my accountant to do the payroll. As well as just taking out the hassle and saving time, I think it would perhaps put a certain distance between paying the employees and myself and any queries they would have could be just directly passed on to the accountants.

greyteam1959

I pay our accountant £26.00 + VAT per month to do the payroll for 4 members of staff. 2 of which are company directors.
I consider the £26 to be extremely good value given the complexity of payroll these days.
HTH

[Deleted User]

Also consider big changes coming in to the PAYE system. Real Time Information will require you to submit personal details of employees and payment details each time you make a payment! The online form for RTI has something like 108 fields, not all will apply but will you have the knowledge to know which do and which don't?
As Savvy Sue has said do you know how to correctly calculate SSP and SMP? Mistakes are costly,I know this as most of my clients come to me when they are in a mess or have been fined by HMRC.

I don't know what you pay, my prices are not far from what Mervyn11 quotes above. We charge for Monthly £7.50 per payslip for first 5 then £5.25 for next 5 and any over 10 £2.60 (plus Vat).

Accountants often offer discounted payroll service as 1) It saves them the job of checking it whilst doing your Accounts and 2) they get the Juniors to do it.

property.advert

I think it is a minor expense in reality and there should be some trade off in your accounting costs.

aj9648

I pay £1 per employee (whether they are weekly or monthly) and its a great service

Laurajo_2

With RTI, it's a bit more of a pain then it used to be, particularly if your employees are in a paid per hour basis, and the penalties are fairly severe for doing it incorrectly.

It's not just being able to use the software; you will need a good knowledge of the PAYE system, SSP, SMP etc.

That said, if your payroll is fairly straightforward there's no reason why you shouldn't be able to go it alone. I'd suggest reading through all the reporting requirements with hmrc and the getting started with RTI info available on hmrc web. I'd also be wary of people telling you it's 'easy to manage your own payroll'...you don't know a) if they're doing it right (this is speaking from experience - we have lots of clients who've said they can do the payroll, then 12 months down the line we're trying to sort out a huge mess which costs twice as much in fees as if we had done it in the first place) and b) they might have more knowledge in the area than you.

Fwiw, I would always look at outsourcing payroll - it's relatively cheap, and you should be looking at less than £25 per month for this. You probably have mobile phone contracts that cost more.

Opinion

Wouldn't even dream of doing my payroll. The amount of emails I end up sending back and forth and the stress it saves, I'd happily pay double what I do.

Savvy_Sue

I wouldn't want to DIY now: I used to do a weekly payroll for varying nos. of staff mostly on what would now be zero hours contracts. However, it was straightforward in that no-one ever got pregnant, we didn't have to pay SSP very often, and only small sums were involved. Oh, and no-one earned enough to have to repay student loans (most of them were still students).

It's very useful understanding how payroll works, but I wouldn't want to do it where student loans and SMP were involved, and RTI makes it more complicated too.