Why Outsource Your Payroll?
If your business is like most others, you probably started out either entirely on your own or possibly with a partner or two. Whichever way you did it, the first thing that you concentrated on was gaining customers. You may also have shared the tasks of producing your products or providing your services with your partners if you had them.
Assuming your business start-up was successful, in the space of a few short months it could well have got to the point where you were unable to manage everything on your own, so you may have needed to employ a secretary, or someone to assist with providing the services or producing the products, and the instant that you did that you became an employer, which means that suddenly you were faced with a whole raft of legislation relating to employment, payroll, tax, national insurance contributions, and even pension provision, none of which you would have given any thought to just those few months before when you began.
In fact, it is only when you become an employer for the first time that you realise just what a minefield payroll can be. Nevertheless, when you only have one employee, or when you expand further and have two or three, you can probably just about cope with your payroll on your own. However, as your business grows, you have to take on more employees, and the problems simply multiply. Depending upon the status of an employee, you can have two employees doing exactly the same job for exactly the same pay, and yet the tax and or national insurance contributions that they make can be different.
In fact, it probably will get to the point where you need to train one of your current employees to handle your payroll as an additional responsibility to their main job because you either don’t want to or cannot handle it yourself, and yet you do not have a big enough payroll to justify hiring a full-time employee to deal with it.
Outsourcing Is Far More Efficient
It is at this point that many employers begin to realise that it is far more efficient to use a payroll service for small business in the UK than it is to struggle on and keep it all in house. In fact, there are a lot of benefits to a small business in outsourcing the payroll, not the least of which is the cost of doing it yourself. Payroll is, after all, nothing but an overhead, and as your business grows, that overhead just gets bigger and bigger.
You need payroll software, which costs money, and there is the cost of training an existing employee or later on hiring a full-time payroll manager. On top of that you have to have a printer to print and distribute the payslips, create tax documents, and produce pay cheques or transfer funds to each employee’s bank account. Then you have to produce your tax returns and national insurance figures.
Possibly the biggest headache is keeping up with all of the latest changes in the tax laws and regulations. A payroll service for small business in the UK can handle all of that with ease because it is what they do. Their people know and understand all of the legislation, which it is unlikely that a small in-house payroll team would be fully conversant with. So, by outsourcing your payroll to a specialist company you can have confidence that your payroll will be accurate, and you will not get into trouble with HMRC and suffer from fines for making errors.