PAYE and payroll tips for UK startups

PAYE and payroll tips for UK startups

UK startups across all business sectors face legal responsibilities to pay employees appropriately. Some factors to consider include ensuring payment of the national minimum wage at the very least and ensuring all essential deductions from salaries. Essential deductions include any necessary repayments of student loans and pensions, as well as income tax and national insurance contributions.

PAYE tips for startups

SQK Accountancy specialise in PAYE and VAT for startups and our experts have offered the following PAYE tips and advice for UK startups:

Register your business beforehand

Before setting up your payroll it’s important to register your startup with HMRC as all salary payments you make will need to be reported by way of a Full Payment Submission (FPS) in digital or manual format. If you plan to operate payroll software, you can opt to submit digital PAYE returns. This may be the best solution as the UK is moving closer towards an entirely digital financial administration, so digital PAYE returns will soon become a legal business obligation.

Sort out the payroll function

No matter how you decide to run your business payroll, you will need to ensure it is correctly set up from the outset. Some factors to consider include calculating net and gross salaries, accurate PAYE tax deductions, national insurance deductions and payments of statutory relief, such as maternity pay or SSP. All employees are entitled to receive a payslip detailing earnings and this should be in a recognised format.

Pension auto-enrolment

Just about all UK employees are entitled to auto-enrolment on company pension schemes now. They can opt out of the pension scheme if they choose, however, you will need to take on board a pension provider and offer all eligible employees the option to join the scheme. You are legally obliged to contribute to employee pensions and the current employer rate is 3%, with employees paying an additional 5%. You can find out more about your legal obligations for pensions on the website of the UK Pensions Regulator (insert link

If you would like to discuss any aspects of PAYE or VAT with the specialist accountants for startups, don’t hesitate to get in touch.

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