Bookkeeping / Payroll Questions
What are the advantages of using a bookkeeper and is it appropriate for a start-up company?
There are several benefits to using a bookkeeper. These can apply whether you are a new company or well established. A few key benefits are below.
- Save Time Using the services of an experienced bookkeeper can save you time so you can focus on the areas of your business that you know best. A professional bookkeeper is proficient at thebookkeeping tasks and focussed on completing them. Business owners or their staff are often distracted by other areas of work so the books take longer to complete!
- Save Money Using a bookkeeper can help to save you money in a variety ways:
- by avoiding fines for late or incorrect filings to HMRC
- making mistakes in the way your data is entered
- save on your accountants bill by providing information presented in the right format
- Keep within the law There are often revisions to the rules and legislation relating to the information companies are required to submit. Get it wrong and there can be financial penalties or even custodial sentences. Swann Systems Ltd keeps up to date to ensure we are working within the law, and keep you informed of changes that affect you.
- Cygnets We offer a modular package to help start-up businesses, providing you with experienced specialists to focus and support all your bookkeeping activities. Ensuring you understand legislation, accountancy packages, analysing you profit and loss and providing guidance to help your new business grow.
Should I outsource or look to recruit a bookkeeper in house?
Outsourcing suits many companies as it means you are getting professional help focussed on keeping your books up to date but you can avoid recruitment and employment costs (including NICs). You benefit from having someone entirely focussed on your objectives with out having any employer responsibilities.
Bookkeeping tasks vary from month to month or time of year. Your Bookkeeper only costs you for the time taken covering busy times and less hours when you are quieter -thus you only pay for what you are using, aiding your cashflow.
What is the cost of your services and do I have to sign a long-term contract?
During the initial, free consultation, Swann Systems Ltd will assess what your need doing, how regularly. We will ask a series of questions that will help us to provide an estimate of how many hours support you will require on a weekly, monthly or quarterly basis. We will provide you with a fixed hourly rate for our services.
Swann Systems Ltd do not require you to sign a contact, of any length. We are pleased to build long-term relationships with our clients and we are confident you will be happy with the service we provide. We review your needs and tailor our services over time, without any penalty to you.
How will you work with us?
Swann Systems Ltd aim is to provide a hassle free service, tailored to your needs. We can work at your premises or off-site depending on your needs and preferences. We can work with your existing bookkeeping / payroll system or recommend an appropriate method if you do not have a system in-place or are in anyway unhappy with your current system. Swann Systems Ltd will ensure that switching over to use our services does not affect your day to day operation and will require minimal effort on your part. (see testimonial)
Can you help me with Making Tax Digital?
Yes we can assist with all of this, and to help with your understanding:
MTD for VAT does not require you to keep additional records for VAT, but to record them digitally. Filing as normal through your Business HMRC gateway.
MTD for sales only requires Date of invoice, NET amount (amount charged to customer excluding VAT) Vat amount and % VAT.
MTD can only be sent to HMRC via a recognised provider – mainly the accounting software packages. We can provide you with the details and work with you to understand each of the following software packages Xero, Sage or Quickbooks, all are recognised providers and could help you with your returns.
MTD for income tax requires you to have an HMRC gateway. They are calling this your own Digital Tax Account (DTA). Covering your self-assessment tax, MTD.
How do you conduct training courses?
We provide Training to help you understand and make best use of your accountancy system, whether it is manual, a spreadsheet or a proprietary package such as SAGE, Xero or Quickbooks.
Training is tailored to your specific areas of interest and how your company operates.
All Training is delivered in bite size modules at your pace. You can ask questions throughout and we can go over things as often as you need or move on quickly. It’s up to you.
Training is delivered 1-2-1 at your desk, or Swann’s office using your computer to avoid complications of different PC / office settings.
What is the cost and duration of training?
All Training is delivered at fixed hourly rate. The average of each training session is two hours. The number of training sessions will be dependant on your needs and preferences; You may only require one or two sessions. This will be discussed with you at the initial consultation, where the trainer will assess your requirements.
I am looking to take on my first member of staff what do I need to do?
You will need to register with HMRC as an Employer. You will then be sent an employer registration & reference letter: -
- You will be sent a PAYE reference number 123/AB12345 this is for any queries with HMRC re payroll / employer office
- You will also be sent a Office Reference number 123/AB12345678 – this is for any HMRC PAYE payment queries – it is also the number to put on any PAYE/NI payments to HMRC
Swann Systems Ltd can take you smoothly through this process and act as your agent.
What information do you require to set up a new employee?
When you are looking to take on a new employee, contact us and we will send you a New Employee form to fill in. This will request all the information required to set them up on the payroll system.
Do you pay my employees?
- You have the option to pay your own employee’s or give bank access to Swann to pay them on your behalf
- You receive payslips for your employees - which might include yourself
You should then arrange payment of the amount on the payslips to your employees.
How do I pay PAYE & NI?
You will also receive information giving you the amount of PAYE / NI that is due to be paid to HMRC, with your payslips.
- Note that Small Employers currently have an annual £3000 NICS employer allowance – this relief will be calculated within your payroll software.
Paying HMRC – Bank Details:
- Payment total amount £00.00
- Account Name HMRC Cumbernauld (majority are Cumbernauld)
- Account Number 12001039
- Sort Code 08 32 10
- Reference Your accounts office reference number+
Year / month
You will be sent a letter from HMRC every year – outlining the year/month reference and pay dates. It is very useful to keep this in your payroll folder. HMRC use the following reference structure to keep track of each financial year:
- PAYE year 6th April – 5th April year ref is yearend number (ie 2019 – 2020 ref 20)
- Monthly is numbered (April month 1, May month 2 etc)
- Weekly is numbered from the first Friday after 6th April (note some years have 53 weeks)
Setup your HMRC PAYE/NI payment:
- HMRC payments should be made and received by HMRC on the 22nd of the following month ie: September payroll – should be paid by 22nd
- We suggest that you pay on the 15th to make sure the money has been received
- If sending a cheque send well in advance
- Remember to check if you have Employers NIC allowance deduction
Remember you will need to keep all PAYE payroll paperwork for 7 years
How do I pay Pension contributions?
If applicable you will also receive details of any company pension deductions and amount due to company pension provider.
- Your Company pension cost will include your employee contribution and your employer contribution
- Many Pension providers will take the pension costs by Direct Debit
What other deductions may I have to pay?
If applicable you will also receive details of any deductions – ie Student loans, attachment of earnings orders etc, giving payment due dates and bank details by the relevant bodies
How do I calculate holiday pay?
Calculations of holiday pay will be based on the agreements made with your employees, when you set up their original contract. We can keep records of holidays taken via their payslips, but we also recommend that you do track these.
If an employee leaves we can help you to calculate any holiday pay that they may be due in their final pay.
Employee’s Pension /Auto Enrolment Questions
What is Auto Enrolment?
It is a workplace pension scheme provided by every UK employer, started in 2016, overseen by ‘The Pensions Regulator’.
What pension scheme options do I have?
You have the option to use:
- National Employment Savings Trust (NEST)
- The People’s Pension
- NOW: Pensions
- Or any accredited private pension scheme.
We had a pension scheme – ages ago – can we use it?
Check with the pension provider that the scheme is compliant with the new legislation.
Can’t I just use the government scheme?
You have to due diligence when choosing the pension scheme – you don’t want an employee in future years to take legal action as their pension wasn’t what they thought it should be! Keep notes as to why you chose the scheme and the other schemes you looked at. Remember it is up to you to check which is the best scheme for your company & employees. Seek a free I.F.A appointment.
Will it cost me money?
All schemes will have an ongoing annual fee and/or a % on the contributions made. All private pension schemes will have setup fees from £400 to over £1,000.
As the employer you will need to add a % to the amount each employee contributes.
Can I be refunded for these additional costs?
Initial and annual costs are the companies’ expense, you will get tax relief on your % contributions.
What is a Staging date?
This is the date that you will need to have your pension scheme setup and start using.
I have had a letter asking to confirm my nominated contact – but they sent it me – so they know I am the contact, right?
Even though you have been sent the letter correctly – you will need to confirm that the nominated contact is correct.
What do I tell my staff?
There are official letters to be sent to all staff, these are available from the TPR website, pension providers will give you these (check if additional cost).
Do all my staff qualify?
If they are aged between 22 & state pension age up to 74 they are part of the scheme. If they earn above £10,000/yr.
My employees have said they don’t want the pension – so why should I bother?
It doesn’t matter if your employees have said they don’t want to be part of a pension scheme. By law you have to provide one. If you don’t put a scheme in place you will be fined. You need to enroll them – they can then deregister from your pension provider.
My employees have said they have their own pensions – so why should I bother?
It doesn’t matter if your employees have said they have their own pension scheme. By law you have to provide one. If you don’t put a scheme in place you will be fined.
How do I administer this – it sounds very complicated?
All the main payroll software packages are compliant with calculating the pension contributions from both the employee & employer. They are then able to create a report for you to send to the pension provider. You then pay the money to the pension provider. Bookkeepers & Accountants provide payroll services all you have to do is send the payroll hours / salary to them to process.
This is all too complicated – Can’t I leave it all to my bookkeeper / accountant?
You will need to review the pension scheme that is the best one for your company & employees – this can only be done by a qualified IFA (Independent Financial Adviser). Bookkeepers / Accountants are not IFA’s so can help the running of the scheme but give advice on the type of scheme to use. Your bookkeeper / accountant can process the scheme after you have set it up.
What records do I keep & how long for?
All records need to be kept for 6 years – if electronic – they must be accessible for that time period.
Every 3 years – you will need to reassess all of your workforce and re-enrol every employee – whether or not they have opted out. Your employees will need to ‘opt out’ again directly from your pension provider. This is not something you can do on their behalf as it is illegal.
Do you supply software for SAGE, Quickbooks and Xero?
Yes we can supply you with software or we can advise you were to obtain a copy directly. We can install the software and help you set it up and get you started as part of our Training or Bookkeeping Services.