22 May Three payroll mistakes your startup should not make
If you have recently started your own company, then there will be lots to get done. Just getting a foothold in your sector and attracting customers is enough for any startup to be going on with. Alongside this, looking after your payroll is crucial if you employ staff. This not only means they get paid correctly on time, but also that accurate details are reported to HMRC each month as required. Unfortunately, this can be one area that some new businesses struggle with. This can be especially true if you do not have a head for figures and are looking after it all yourself.
Very often, it is knowing what not to do that is essential. Here are a few common payroll mistakes that most startups make but should be avoided.
Not getting specialist help
As noted above, many business owners will struggle to deal with the payroll themselves in an effort to cut costs. This is not only dangerous but also counterproductive. If you do not understand how to deal with your payroll properly, then you will be liable to make errors on it. In addition, the excess time it will take could be spent on making money in your core role. A better bet is to call on specialist help by outsourcing your payroll. This is cheaper than employing a member of staff to do it but still frees you up from handling it personally.
Incorrect employee classification
One very common mistake many startup businesses make on their payroll is wrongly classifying employees. This is not to say anything untoward is going on – most of the time it is a genuine error. The growing number of freelancers and contractors many new businesses use can make correct employee tax classification hard. To avoid this, you really need expert advice or a thorough understanding of the most recent regulations in this area.
Using the wrong tax code
Another innocent payroll mistake some new organisations may make is putting the wrong individual tax code against a staff member. Each employee has a personal tax code provided by HMRC that must be recorded against them only when you run your payroll. If you get any mixed up, you could end up facing a big bill in the future for underpayment of tax.
Let SQK Accountants help with your payroll
If you need expert help with running your payroll or processing your company PAYE, then get in touch today. We have many years of experience in helping startup businesses handle their payroll. By outsourcing this key business task to us, you not only save yourself lots of time but you’ll get it done right every time.