FreeAgent are the first to admit their payroll system is pretty basic. Finding an alternative isn’t easy.

No payroll provider links to FreeAgent so whichever one you choose, you’ll have to enter the payroll details manually every week/month. Third party payroll processing is expensive and you’ll still have to enter the payroll details yourself.

FreeAgent copes best when there are no changes to the payroll (new employees, leavers, bonuses, etc.). Problems can arise with incorrect PAYE Codes, no P45 and directors starting employment part way through the tax year. At the end of the tax year FreeAgent doesn’t allow you to submit your Employer Annual Return (P35, P14s and P60s) from the software. You have to register with HMRC and enter the details online.

Our solution to these problems is to offer two services:-

1. During the year we will monitor the changes to your payroll (new employees, leavers, new PAYE Codes) and make sure they have been dealt with correctly. We’ll also point out, where possible, errors in the Codes themselves. The price for this service is £80 per year.
2. At the end of the tax year we will complete your P35, P14s and P60s based on the information in FreeAgent and submit them to HMRC. We will send you copies of the forms, together with an acknowledgement from HMRC that the return was submitted on time. Late submission incurs a penalty of £100 for every month it is late. The price for this service is £80 per year.

The price for both is £150 per year.

HMRC have sent an “Email Alert” to all employers who have registered for the HMRC employer email alert service. The details are shown below but if you’re an employer and you haven’t received this e-mail I would advise you to register as quickly as possible because this is the only way HMRC will communicate with you in future.

Welcome to the Employer Email Alert Service

HMRC have just published important information on their website which includes:

• the latest edition of the Employer Bulletin, issue 40, which identifies 3 essential articles
• the latest version of Basic PAYE Tools for 2012
• how to finish your payroll for 2011-12
• start your payroll for 2012-13 by using our form P9X (2012) Tax codes to use from 6 April 2012, at http://www.hmrc.gov.uk/helpsheets/p9x.pdf and
• Real Time Information

To find out more go to http://www.hmrc.gov.uk/paye/forms-publications/employer-pack.htm

I would desperately like to believe that whoever wrote the latest HMRC press release does have a sense of humour because it is funny.

Taxman urges employers to ditch AN Other

is a plea to employers to get their PAYE paperwork in order, after more than 500 returns claimed to employ “AN Other”, and the mistakes don’t end there.

128 staff were entered as Mr, Ms or Mrs “Dummy”
572 people had surnames which only included the letter X, ranging from Mr X to Mrs XXXXXX
75 staff had the surname “Casual”, 11 “Cleaners”, 9 “Workers” and 6 “Students”
824 employees were called “Unknown” and
40 people were apparently 200 years old or more after incorrect dates of birth were submitted.

Don’t forget that if you pay your PAYE quarterly the deductions for July, August and September 2011 are due on or before October 19th unless you’re paying electronically in which case you have until October 22nd for the money to arrive in HMRC’s bank account.

If you are registered as an employer but have not deducted any PAYE or NationalInsurance from your employees during the quarter you must tell HMRC by submitting a £nil return.

FreeAgent users are reminded this payment is due in the Tax Timeline on their Overview page.

If you’re not using FreeAgent, and I can already hear voices in Edinburgh saying “Who isn’t using FreeAgent?”, then you can sign up with Business Link and receive e-mail reminders from them. The only problem with the Business Link scheme is that you have to register using your Government Gateway details and who can ever remember where they are!

When I wrote the post about work rules I never imagined the Financial Times would publish my letter to the Editor suggesting a third rule.

P.S. The reference to graduates relates to the original article. In my opinion the rules relate to everybody – graduates are no better or no worse than non-graduates (just so I don’t upset any particular group!)

Most small businesses are struggling with the amount of  employment legislation which has been introduced over the last twelve years.

The recent bad weather has added to their problems with many businesses having to lay off staff but not many of those businesses seem to be aware of Statutory Guarantee Pay.

Briefly, it is the minimum an employee should be paid for any complete day when they are laid-off work. To get statutory guarantee pay they must:

• have been employed continuously for at least one month (this includes part-time workers)
• reasonably make sure they are available for work
• not refuse any reasonable alternative work, including work that is not in their contract
• not have been laid-off because of industrial action

More information is available on the Business Link website and the BIS site.

The only crumb of comfort I can offer to hard-pressed employers is that the upper limit is £21.20 per day (although this will be revised on February 1st).