completing tax forms

HMRC doesn’t always make taxes and compliance easy to understand which is why we have compiled this guide with all the basics you need to ensure you avoid costly mistakes that may lead to fines or investigations.

What are payroll taxes?

In the UK, employers are responsible for all the admin associated with payroll including tax deductions. There are a number of deductions that must be made from employees’ wages before they receive them. Two of the main tax deductions are National Insurance and Income Tax. It is important to note that most employers pay their staff via PAYE and to remain compliant National Insurance and Income Tax must be deducted. If you are paying your employees or workers via another payroll model such as CIS or are self-employed, please contact our team who will be able to provide advice on further information on the taxes you will be required to pay.

Does every employee have to pay the taxes associated with payroll?

There are different rules for residents and non-residents of the UK. If you employ non-residents they are only required to pay tax on income earned within the UK. In contrast, UK residents must pay tax on all UK and foreign income. It is vital you double-check resident status when taking on new members of the team so you can ensure your business remains compliant with UK tax laws.

How should I account for employee benefits?

If you are providing employees with benefits these must be declared using HMRC’s Payrolling Benefit in Kind Service (PBIK). Recent changes mean that HMRC no longer accepts informal reporting of employee benefits in kind. Employers could also previously offer unofficial benefit schemes, now all benefit-in-kind schemes must be approved. If you offer benefits to your employees speak to your accountant or the Bishop Oak team who will be able to offer you further advice and support to ensure you are HMRC compliant and paying the correct taxes in relation to Benefit in Kind.

If you are still feeling unsure about the amount or types of taxes you must pay that are associated with payroll, please give us a call or send us an email and our expert team will be happy to provide advice, and guidance or take the pressure off and manage payroll for you.