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Contact us to find out how TRW Accountants can help you with your accounting needs.
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Keeping Payroll Up to Date
As your business grows, it’s important to keep up to date on payroll obligations. Getting a new starter up and running as quickly as possible will be a relief once their first payday rolls around (nothing hurts morale for a new arrival like realising they might have delays on getting paid) and it’ll also help you to manage your tax contributions, as well as other pay related issues. HMRC must be told much of the same information in a timely fashion, so having this all on hand is a benefit.
Providing Independent Financial Advice In Lancashire
Preparing Payroll for a New Employee
Once your new starter has their contract, and before their first payday, there are a few steps which need to be followed.
Assuming they earn at least £96 per week (which works out to £5,000 a year), your new employee will be paid through PAYE. You will have to work out their tax code, which is done by getting certain key information.
Providing Independent Financial Advice In Lancashire
What Payroll Information Do You Need from a New Starter?
As when setting up payroll, you need:
- Date of birth
- Gender
- Full address
- Start date
- Full name
- National Insurance number
You will also need other information from their P45:
- Leaving date (from their previous role)
- Student Loan deduction status
- Total pay and tax paid to date for the current tax year
- Existing tax code
(Make a note of this information, as you will need to keep it in your payroll records for the three tax years following the current tax year!)
If your new starter didn’t have a P45, there is a starter checklist they can complete instead. You can find this on the UK Government website here.
Providing Independent Financial Advice In Lancashire
Putting It All Together
Confirm with your new employee which student loan plan they’re on if they have a student loan. If they’re not sure, use Plan 1 to begin with. You will need to report these deductions to HMRC when you run payroll.
As well as getting this information into your payroll software (or passing it along to your payroll service if you use one), you will then need to prepare a Full Payment Submission (FPS) for HMRC ahead of the first payment.
This will include their identifying information, tax code and starter declaration, and pay and deductions from the point where they started working with you.
You will also need to give them a payroll ID. These need to be unique within your organisation – re-using a previous ID creates duplicate records which can lead to inaccuracies and complications down the line.
With all of this done, their payment will be accurate and on time, and you will be in compliance with HMRC.
If this feels daunting when laid out like this, don’t let it keep you from growing your business – look for professional support instead. Contact us and we’ll be happy to help you with your payroll.
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Contact TRW Accountants
Address:
TRW Accountants
95 King Street
Lancaster, LA1 1RH
Contact Details:
Tel: 01524 64187
Fax: 01524 60029
Email: office@tr-w.co.uk
Registered in England and Wales. Registered office – as above. Company registration 03851905
