Payroll and employing staff

Registration of a PAYE scheme in the UK

Most employers in the UK must operate Pay As You Earn (PAYE) as part of their payroll. This is HM Revenue & Customs’ (HMRC) system to collect Income Tax and National Insurance from employment income paid to employees. You do not need to register for PAYE in the UK if none of your employees are paid at or below the Lower Earnings Limit, get expenses and benefits, have another job or get a pension income. To operate PAYE through payroll, employers need to obtain a PAYE Reference from HMRC. Chiene + Tait can register for this on an employer’s behalf. Once registered and obtained from HMRC, the reference is used to electronically submit all pay and deduction information to HMRC on a monthly basis, relating to all employees. Our payroll team can support you from the initial registration of your PAYE scheme, to the ongoing processing of payroll, including the required electronic submissions.

Payroll legislation affecting UK employers and employees

In the UK there are over 170 individual pieces of payroll legislation that employers must comply with – and this is increasing all the time. In most cases, failure to comply with the legislation will result in penalties or fines from HMRC, or other bodies depending on the where the legislation is covered. It is one of our duties as a payroll service provided to ensure our clients always comply with legislation. We can also provide one-off pieces of advice where required.

Pension guidance and advice on legislation surrounding Automatic Enrolment

All employers in the UK must automatically enrol certain staff into a workplace pension scheme, and contribute towards it. This legislation cam in under the Pensions Act 2000, and is called Automatic Enrolment. Automatic Enrolment legislation is complex and there are heavy fines imposed by The Pensions Regulator for non-compliance. It is always best to seek advice if unsure. Our payroll team can support you with any queries or concerns you may have.

National Living and Minimum Wage advice

In the UK, employers must comply with the National Living and Minimum Wage legislation which states the minimum hourly rate an employee can be paid. These rates depend on the employee's age and other factors. It is important that employers ensure they are paying staff at least the minimum rates above. If an employer pays their staff a fixed salary, a calculation should be carried out to ensure it complies with the rates - see the current rates below.

Payroll healthchecks

A lot of the complexities around payroll involve making sure that employers comply with the many areas of legislation covering employees and employers. Holding accurate records also forms part of the legislation. Our payroll team can assist with a payroll and pensions health check – this will be a complete audit of the systems, process, and payroll data of an employer to ensure compliance and efficiency.

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Key Contacts

Carol Flockhart

Managing Partner

carol.flockhart@chiene.co.uk

+44 131 558 5800

Carol Flockhart is Chiene + Tait's Managing Partner, and the Partner leading the firm's Payroll function.

She started her accountancy career at Chiene + Tait , and has since provided business support and payroll advice to a range of clients, rising to the role of Director in October 2008 and to partner in April 2011.

As Managing Partner, Carol leads the Firm’s administrative and operational functions.

The payroll team can provide advice on:

Registration of a PAYE Scheme in the UK
Payroll legislation affecting UK employers and employees
Pension guidance and advice on legislation surrounding Automatic Enrolment
National Living and Minimum Wage advice
Advice on choosing the right payroll software if you process in-house
Payroll Health Checks

National Living Wage

The National Living Wage applies to everyone aged 23 and above who isn’t in the first year of an apprenticeship. The National Living Wage from 1 April 2022 is £9.50.

If you are 23 years old and above and are in the first year of an apprenticeship, the Living Wage does not apply – instead, the minimum you can be paid is £4.81 per hour, as per the National Minimum Wage.

National Minimum Wage

The National Minimum Wage only applies to people in employment who are aged 16-22, or who are first-year apprentices.

From 1 April 2022, the rates are:

Age	Minimum Wage, per hour
16-17	£4.81
18-20	£6.83
21-22	£9.18
Apprentice*	£4.81

*Apprentice Rate. The rate applies to people aged under 19, or people over 19 but in the first year of their apprenticeship. If apprentices are older than 19 and have finished the first year of their apprenticeship, they are entitled to the relevant minimum wage for their age group.

Current National Living and Minimum Wage rates