The next step

http www businesslink gov uk bdotg action detail itemid 1086949246 r l1 1073858808 r l2 1083106843 r l3 1083106693 r l4 1086857322 r s sc type resources

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http www hmrc gov uk ebu payroll acclist pdf

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Payroll software for free

New and improved. In the early days of online services, the Taxman offered some calculators to help you work out a few PAYE figures, but there was no continuity between them, meaning you had to dodge around his website to find what you wanted. By contrast, the new version of the Basic PAYE Tool is a self-contained downloadable program that can work out all the PAYE tax and NI figures for your employees - and it’s free (see The next step).

What’s in the box? The main features of the latest PAYE tool allow you to:

• keep employee records - address, NI number etc.
• work out and keep records of tax and NI
• submit all the statutory PAYE forms online: P45, P44, P14 and P35
• calculate statutory payments, e.g. Statutory Sick Pay
• work out the figures to complete annual benefits and expenses return Forms P11D.

It looks like a great package but it has significant limitations.

Trap. While the tool can be used to work out PAYE tax and NI for as many employees as you like, it will only cope with submitting statutory PAYE returns, P35 and P14, for up to nine workers. And it can’t produce payslips for your employees.

Tip. You can work around the shortcomings of HMRC’s PAYE tool, e.g. by manually producing payslips, but we don’t see the point. Commercial payroll software can be bought for less than £60; it does the same job but also produces payslips and allows you to submit end-of-year PAYE forms for as many employees as you like. The Taxman even publishes a list of payroll software which he has approved (see The next step).

For more information on the PAYE tool (TX 11.17.01A) and for a list of approved payroll software (TX 11.17.01B), visit http://tax.indicator.co.uk.