Managing payroll accurately is one of the most important aspects of running a successful business. At Accounts House, we ensure your employees are paid correctly and on time, your PAYE and National Insurance contributions are submitted properly, and your reporting obligations to HMRC are always met.
We act as your outsourced payroll department — saving you hours of administration while keeping you compliant with RTI, auto-enrolment, and benefit reporting rules. Our payroll specialists integrate technology with personal support, giving you the confidence that every payslip, deduction, and submission is handled flawlessly.
How we Help You Grow
1.What is PAYE?
PAYE (Pay As You Earn) is the system HMRC uses to collect Income Tax, National Insurance, student loan deductions, pension contributions and other statutory deductions. Employers are responsible for deducting tax/NICs, operating payroll correctly and submitting Real Time Information (RTI) for every payroll run.
2. When Must You Register for PAYE?
You must register as an employer if any staff earn £123/week (£533/month) or more, receive benefits, have another job, receive a pension, or repay a student loan. Directors of limited companies normally must register for PAYE.
3. Director vs Employee PAYE Rules
Directors are treated as employees but NICs for directors are calculated on an annual earnings basis. Many directors take a low salary and additional dividends for tax efficiency.
4. National Insurance Contributions (NICs)
Employees pay Class 1 Primary NICs (8% between £12,570–£50,270, then 2%). Employers pay Class 1 Secondary NICs at 13.8% above £9,100. NICs are not payable on dividends.
5. Running Payroll – Employer Responsibilities
Employers must calculate gross pay, deduct PAYE tax and NICs, apply deductions, submit RTI (FPS) for every payment, and pay HMRC by the 19th/22nd of each month.
6. Benefits in Kind (BiKs)
BiKs include company cars, private medical insurance, loans, accommodation, and other non-cash benefits provided to employees or directors. These benefits are taxable.
7. Reporting Benefits – P11D & Class 1A NIC
Taxable benefits must be reported annually on P11D forms. Employers must file a P11D(b) to report total benefits and calculate Class 1A NIC. Deadlines: 6 July (filing) and 22 July (payment).
8. Common Benefits and Tax Treatment
Company cars are taxed based on list price and CO₂ emissions. Vans are often taxed at a fixed rate. Private medical insurance is taxable. One company mobile phone is tax-free. Trivial benefits up to £50 may be tax-free within rules.
9. Payroll Records You Must Keep
Employers must keep records for six years, including gross pay, deductions, contracts, RTI reports, and all payroll-related calculations.
10. Statutory Payments
Sick pay, maternity pay, paternity pay, adoption pay and shared parental pay must be processed through payroll. Amounts and eligibility vary.
11. PAYE for Directors
Directors should plan salary vs dividends, avoid overdrawn loan accounts, use pensions for tax-efficient extraction and file Self Assessment annually.
12. PAYE Penalties
HMRC may issue penalties for late RTI filings, late payments, incorrect submissions or poor record-keeping. Interest may apply.
13. How Accounts House Can Help
We provide PAYE registration, full payroll processing, P11D reporting, director salary planning, NIC optimisation, employment allowance assessment and HMRC compliance support.
Example 1: A hair and beauty salon experienced repeated HMRC penalties due to late RTI submissions. We implemented a digital payroll calendar, automated the submission process, and trained the manager to review figures monthly. The following quarter, the salon achieved 100% on-time filing and saved over £2,000 in penalties.
Example 2: A construction contractor in London struggled with CIS compliance and staff turnover. We set up an integrated CIS-PAYE system, provided monthly reconciliation reports, and streamlined subcontractor verification. Within six months, administrative workload dropped by 40% and the business had a clean compliance record