Payrolls used to be run weekly, monthly or once a year and HMRC were only made aware of the figures at the tax year end.
Now HMRC insist on receiving a report every time an employer pays a member of staff. Payroll calculations can not be 'rolled back' like they could before, because each time a business pays someone, there has to be an RTI submission to HMRC.
Weekly payrolls were always time consuming and expensive to process as you are fundamentally doing four times the work of a monthly (or 4 weekly) payroll run. With all the pensions calculations and deductions lots of businesses need to pay for an outsourced service and having this weekly work carried out is not cost effective.
The other reason it would be best to avoid a weekly salary run is that most customers pay businesses on a 30 day credit term. This means that often you are paying your wages out well before the customer has paid the business for the work. If you can get the staff comfortable with a monthly payroll run you can shorten the gap between paying the team and getting paid by the customer.
It is not an easy transition to make (I remember personal experience of this from years ago), but with one bumpy month and perhaps an advance or two for those who will struggle the most, the change can be made. So many of us pay our rent/mortgage and bills monthly now, the argument for weekly wages is a fairly weak one.
07825 152951Home Page Blog Facebook LinkedIn
I have never used a bookkeeper before so I was a bit apprehensive. Working with BW has been the best decision we have made recently. I knew we needed help with behind the scenes work and this has been a real relief.
Sam B, Cheshunt
It was an experiment but BW has done my end of year tax return for 2 years now. Makes it all very easy and answers any questions. Takes all the stress out of my tax return so I can concentrate on my business.
Jaqueline Parkinson, Harpenden
I learned more about how to direct my business in 20 minutes talking to Jen than in 4 years of meetings with my accountant.
Rob L, Aston Clinton