The benefits of outsourcing your payroll and what to look for when choosing a provider

The benefits of outsourcing your payroll and what to look for when choosing a provider

1 Resources

Do you worry about who is going to run your payroll? Have you suffered a late payroll due to staff absence? If you outsource your payroll you won’t have to worry because it will be the provider’s responsibility to run, on time. Pick a provider with a sizable number of employees to cover holiday gaps etc.

2 Save your time and focus

You don’t need to spend time on payroll, freeing you up to build your business.

3 Changing legislation

You won’t have to worry about this. When the law changes and the way you organise or run your payroll changes, it can be both worrying and time consuming. Outsourcing your payroll will take away all that stress.

4 It could save you money

Staff time can be much more productively spent om other work. You will minimise the risk of mistakes which take up valuable time and can cause upsets. You will also help to avoid HMRC fines. No more expensive computer issues. No more printing & posting payslips. Most businesses find an outsourced payroll service saves them money, sometimes a lot.

5 Reliability

Look for a provider with a proven reputation for accuracy, reliability and personal service – again check the references, so valuable.

6 Experience and Quality of Service

How long has the provider been operational? Make sure you pick one with a proven track record of good service. By proven - ask for at least 6 references and question any reluctance to provide. Check them all as there is no better way of obtaining an unbiased opinion which trumps any boasts on the website  [BookCheck provides 100 current client references with full contact details]

7 Pension auto enrolment

It’s very easy to make mistakes with this as we see very often with inherited payrolls. It can be a minefield. Avoid all this risk - make sure your provider has plenty of experience in dealing with this.

8 A pleasant experience

Nothing beats a one to one personal relationship – will your provider offer this or would you be passed around the place, never being sure who to contact.

9 Furloughing

It’s still with us and is a minefield. 64% of payrolls we inherit have furlough mistakes so avoid this risk

10 Contract Term

Don’t get sucked into long term contracts. Three months should be the limit. Some we have seen are two years which is a real problem if something goes wrong.


Read more about our payroll and auto-enrolment service at and decide for yourself if we can help your business.

This entry was posted in Business Development, Payroll and tagged in Outsourcing, Payroll by Caroline

PAYE - a clever but simple system we take for granted

Sir Paul Chambers was never a household name, even in his lifetime but he came up with an innovation that changed the economy. This was back in the early 1940s when the world was at war and those left behind in Whitehall began to think about the post-war era. We all know about the other institutions founded then, the National Health Service and state education for instance but less is said about the seismic shift in the way tax is collected. Before then, most people paid tax in arrears, calculating what they owed and paying a lump sum to the taxman. The system was clunky and fostered resentment every time tax came to be collected. Chambers’ idea was that pay should be deducted directly from most salaries before it reached the employee’s wallet. The system was called pay as you earn or PAYE. 

Most employees these days have their taxes collected via PAYE, with the upshot that they never see their full wage, a fraction of which is directly collected and sent to the government on their behalf by their employers. In the early days PAYE only covered income taxes but since then other taxes including national insurance have been added and the system has been exported and copied around the world. There is a famous quote that “the act of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least possible amount of squealing”. And the reason the Treasury adores PAYE is that it plucks the feathers far more efficiently than a system where people actively have to hand over the cash themselves. It is no coincidence that council tax is among the least popular of all taxes because you actually see it leave your bank account.

[with thanks to Ed Conway of The Times 19/2/21]

Funnily enough PAYE is easy in another respect, in administering the scheme through a payroll system. PAYE is all based on a simple method of a personal tax code. This code may vary through a year for an individual any number of times for different reasons but usually it’s the same all tax year. For ourselves providing a payroll bureau service nowadays these coding changes are all handled automatically online. So no errors and no delays, better still no administration cost. So whichever way you look at it PAYE is very successful.

The opposite extreme however is furloughing which for us handling on behalf of our clients is a real minefield and at times a nightmare. The UK is on the 5th version, so far, and each one is different where it counts – in the detail. Each time a new version is announced the biggest challenge is obtaining all the detail required in sufficient time - surprisingly difficult. Whereas PAYE is totally automatic, furloughing is just the opposite – it’s totally manual, with no system checks to help. This means that with hundreds of claims being made, covering thousands of employees, inevitably mistakes will be made. It’s also a costly extra task. The pressure is great but it’s just something we have to cope with.


This entry was posted in Payroll and tagged in Payroll, PAYE by Caroline