Real life cost of employing staff

[Inoff the Red]

Don't get to hung up on the payroll aspects of employing someone. If it's not your thing you can get a payroll bureau to process and do you yearly returns.

 

Gareth,

I'm afraid you are a bit out of touch. The days of an annual P35 return have gone as HMRC have moved on to real time processing.

Now payroll payments have to be reported on a monthly basis where the payments for a month have to be reported by 19th of the month following. Later this year HMRC will be introducing fines of £100 for each late monthly return (similar to the fines for late CIS returns).

 

The upside of this is that there is no need for an annual P35 return because HMRC have collected the info on a monthly basis.

 

Once you have established a payroll scheme if in a month you don't make any payroll payments, you have to submit a nil return or HMRC will assume that you are in default and make an assessment of the PAYE and NIC they think you owe.

[Logrod]

Pretty well what the last 2 said.

A lot depends on your outlook and mindset.

I'm not a big fan of sub-contractors, though I do employ a couple from time to time when we are inundated with work or have holidays to cover. I also don't like the way many companies avoid tax by using guys and girls as sub-contractors even though they are technically employed.

If you're committed to building a business that'll support you and your family and your future, then why wouldn't you commit to your work colleagues by giving them some stability and security. Why would anyone want to get rid of people when work gets tight. Work harder to get work in. Commit to people and they'll commit to you.

Costs vary, though you generally get what you pay for. Speak to HMRC and they'll give you the information. Payroll can be a ball-ache as can HR, contracts, holidays, PPE, employer's NI and all the other stuff. It's part of employing so deal with it and look at what you want to achieve. Don't let barriers to thinking get in the way.

If you have someone who can help with your first foray into payroll for little or no money it makes it easier. It's daunting when you have hand over the first paycheque. When you get to £30k+ a month in payroll it's already someone else's problem as you have too many other things to do.

 

I tend to agree with Paul (and I'm a self employed management consultant and have seen both sides of the fence!). You can build flexibility with things like annual hours contracts (NOT zero hours contracts which imho are an abuse). The two other questions you need tio ask are what are the benefits of employing staff? (it's not all negative, especially if you enjoy developing people) and what are the hidden costs of employing contractors?

[likeitorlumpit]

I tend to agree with Paul (and I'm a self employed management consultant and have seen both sides of the fence!). You can build flexibility with things like annual hours contracts (NOT zero hours contracts which imho are an abuse). The two other questions you need tio ask are what are the benefits of employing staff? (it's not all negative, especially if you enjoy developing people) and what are the hidden costs of employing contractors?

 

I've been hearing this about zero hours contracts

I've never offered them but

my son who works on the ferries loves them.

You give the employer days you can work and he gives you work if it is available.

Whats not to like.

Full years holiday pay even though he might have only worked 8 weeks.

Whats the downside?

[Gareth Dalzell]

Gareth,

I'm afraid you are a bit out of touch. The days of an annual P35 return have gone as HMRC have moved on to real time processing.

Now payroll payments have to be reported on a monthly basis where the payments for a month have to be reported by 19th of the month following. Later this year HMRC will be introducing fines of £100 for each late monthly return (similar to the fines for late CIS returns).

 

The upside of this is that there is no need for an annual P35 return because HMRC have collected the info on a monthly basis.

 

Once you have established a payroll scheme if in a month you don't make any payroll payments, you have to submit a nil return or HMRC will assume that you are in default and make an assessment of the PAYE and NIC they think you owe.

 

Maybe not as out of touch as you think, I process our wage run weekly and monthly for our staff using Sage Payroll 50 which does our RT submissions at the touch of a button, but was hoping to keep it more tangible for someone entering into the fun of running staff. I have to admit I have personally have never used a bureau but know people who do and thought the bureau would take one of the worries away from employing people. At the end of the year there is still a year end procedure to complete though - although if you're using Sage 50 its straight forward.

 

For starting off there is Instant payroll which is cheaper but we have over 10 staff which is the user threshold hence we us Payroll 50 (Other Software also available)

Edited January 8, 2014 by Gareth Dalzell

[Logrod]

The problem with a lot of zero hrs deals is that there is often a ban on working for anyone else and no guarantee of any hours at all.

[likeitorlumpit]

The problem with a lot of zero hrs deals is that there is often a ban on working for anyone else and no guarantee of any hours at all.

 

that sounds illegal- i mean the bit about loyalty

[Ian C]

My accountant does all my book keeping and payroll. ...no hassle to me I just find and do the work......oh yeah and pay the wages!

[aitch]

The problem with zero hours contract is that you can't guarantee a wage each month. Its fine if your not reliant on the money but if you've got a family to feed its useless. I know some people who can't say no if they are called in so they have no opportunity to secure other work to make up for it.