what is payroll:
A payroll is list of all employees that are entitled to receive wages and other benefits from an employer, they all should be on payroll register. A typical payroll submission consists of number of hours worked by each employee, benefit received by that employee, wages or salaries paid to that person, PAYE tax deducted, NI deducted and any other deductions including student loan and pension contributions.
Legal obligation of payroll:
As a registered employer you have a legal obligation to inform HMRC about all members of your staff and number of hours they have worked in certain period. we provide services to manage your payroll through contemporary digital software to ensure consistent and reliable services. If you are unsure whether to take salary from your company or solely withdraw dividend at the end of the year then you don’t need to sweat a single drop and leave all this responsibility to Businesswise Accountants Ltd.
If you are a startup:
If you are new business or hiring new employees, then it’s legal requirement to inform HMRC about new entrants and submit their relevant details to verify. We will avouch submission and reporting is done on time and as per legal requirements. Any new business needs a good team to succeed and its crucial that employees are paid accurately and on-time, if team members are constantly not paid on time or a wrong amount, this could easily demotivate the staff.
If you are already running a payroll:
If you have a running business and one of your employee is paid £120 or more then you need to register for Payroll and then all this information should be send to HMRC. But if you are registered for payroll then any new entrants should be reported to HMRC regularly, any change of circumstances should be achieved on or before pay date.
What are components of RTI:
· A Full Payment Submission (FPS) electronic submission report to HMRC before they make any payment to employees.
· An Employer’s Payment Summary (EPS) if during a PAYE month an employer makes any statutory payments to HMRC (Statutory Maternity Payment or Sick pay for example) or suffers Construction Industry Scheme (CIS) deductions, or has not paid anyone. Update YTD payments for each employee.
There are penalties of various nature can occur as a result of non-compliance with RTI, Penalties under RTI include:
· Failure to file by RTI.
· Late filing.
· Incorrect submission.
It is clear from this discussion that RTI is a complex procedure and requires delicate handling and advise of a qualified expert. Businesswise Accountants specialises in dealing with payroll of all sizes and industries.
It is your legal duty to submit monthly payroll data to HMRC apart from paying your employees. This enables HMRC to update their data and status of respective employees. You also have to deduct from NI from their monthly wages and pay to HMRC, this all can be done under one roof at Businesswise. An employer is also legally obliged to submit year-end payroll return, this includes filling EPS and FPS. This benefits in 2 ways, first HMRC will gauge if employer and employee has paid a correct amount of tax and secondly it will help them determine state benefits for individuals. It is absolutely vital to file correct information, and that is where Businesswise is best at.
CIS is the construction industry scheme, and CIS payroll refers to the processing of payment from contractors to subcontractors under the scheme. CIS payroll can be done in-house by a contractor, our outsourced to a payroll company specialising in this scheme. Contractors paying their own subcontractors process CIS payments at the same time as the rest of their payroll. Any deductions under CIS are paid to HMRC. A return is then submitted showing what was paid to subcontractors. It’s possible for an employer to be registered with PAYE, and to also be registered as a contractor under CIS. A dual PAYE/CIS payroll system allows an organisation to pay different types of staff in line with HMRC requirements.
Who does CIS apply to
Whether you are a contractor or sub-contractor CIS applies to both of you, for some individuals it can confusing to understand if you are contractor or sub-contractor and here is simple thumb rule for that, if you use sub-contractor or your business has spent £1 million or more over the period of last 3 years then you are qualified under contractor list. Similarly, if you are an individual builder, company or self-employed and works in construction industry then you have to register under CSI.
If you are already registered for CIS, then we have to verify with HMRC before any payment can be made. In simple terms, verification is to check if your sub-contractor is registered under Construction Industry Scheme. We at Businesswise are here to help you verify those details and stay compliant.
Once the verification process is completed, then you are ready to process the invoices and payments. You are legally obliged to submit monthly CIS return submission to HMRC, this will be details of all payments processed in the last tax month. Late fillings can make HMRC to impose penalties and this will attract financial difficulty for you. But Businesswise is here to rescue and help you focus on constructing new buildings.
If you are sub-contractor and your contractor deducted CIS amount from your payment, then good news is Businesswise can help you reclaim back some part of it. CIS paid is compared against any PAYE or corporation tax you owe to HMRC and all the excess amount can be reclaimed back.
Why Businesswise Accountants
North of England is seeing a boom in construction industry and if your work is related to this industry, then look no further and contact us to register you for Construction Industry Scheme. We will skillfully advise you how to register depending on nature of your position in work chain. We will help you tick all relevant boxes to stay compliant with this scheme.