Payroll Outsourcing

Marriage Allowance

Marriage Allowance

HMRC would like companies to encourage their workers to apply for the new Marriage Allowance earlier in the tax year.  Your staff can still apply for a tax code change this tax year, but need to hurry.  The savings are processed through payroll, and will take little or no effort for the employer.

The Marriage Allowance allows a husband, wife or civil partner transfer £1060 of their personal tax allowance.  This tax year this would mean a saving of £212 for that person.  The application process is online and can be accessed here.  There is also an online calculator available where employees can see how much tax could be saved.

Who should apply?

There are three criteria that should be met before the application is started:

  1. both partners were born after the 6th April 1935
  2. the transferer income is £10 600 or less
  3. the transferee income is between £10600 and £42 385

This is current advice for the tax year ending April 2016, for the latest guidance go directly to HMRC.

How does it work?

HMRC will issue tax coding notices to both parties, and these will be issued to the employer in the form of a P6 tax coding notification.  The employer should not change the tax code through payroll based on an employee notification, but should wait for the coding instruction from HMRC.  Once the P6 arrives the tax code can be changed through the normal payroll process.

The transferer will receive an ‘N’ code, for example 954N, and the transferee an ‘M’ code, for example 1166M.  These tax codes will be used by your payroll service to alter the personal tax allowances and so enable the saving to be passed across.

There is no need for an employer to be aware of any of this, especially if they are using a payroll outsourcing company, but it may be helpful to raise awareness of this tax break in the work place.


HMRC Severe Weather Helpline

HMRC Severe Weather Helpline

HMRC have announced a telephone helpline to assist anyone affected by the recent severe weather.  You can find further details here.

0800 904 7900

The number is in addition to other HMRC helplines, and should be restricted to matters arising from the recent severe weather and floods.  The HMRC severe weather helpline should be view as a helpful and proactive step, and anyone affected by the weather that has concerns about tax or related matters should contact HMRC.


Specialist Veterinary Payroll

London Vet Show 2015 Report

Thank you to everyone that visited our stand at London Vet Show 2015, we were tucked away a little bit so well done for finding us.  We had great fun raising the profile of our specialist veterinary payroll services, met a lot of new people and handed out a lot of chocolate coins and post-it notes!

We are still working through all the details that we received, and from the competition we ran it is becoming very apparent that the vast majority of employees value accurate payroll solutions.

Congratulations to our competition winner – Geraldine of Fairfield Veterinary Centre, Hinckley.


She and the vets practice were delighted when the large hamper of chocolate was delivered.  Thank you to everyone that entered, we will get an acknowledgement out to you.

We knew before the show that our approach would benefit many vets practices, and although this was confirmed in the conversation we had, often there was a fear of change.  Our specialist veterinary payroll solution was well received, and a great many people approached with questions we were able to quickly answer.

We also noticed that people were surprised by what our standard outsourced payroll service actually consisted of, and were not aware that such a service existed.  They were also pleased that we had an insight to veterinary practice and did not need every small detail spelt out, and could make suggestions with how things could be better organised to save time within the veterinary practice.

We were surprised, and disappointed, with some practices tolerance for poor performance, as there were some shocking anecdotes.  There were issues both with in house payroll and outsourced payroll services.  Although we should view this as a great opportunity, it is always a shame when there have been unnecessary issues.

One recurring theme was auto-enrolment pensions, both with veterinary practices already staged and those staging in the next year.  This really should not be a major cause for concern, the process is not as painful as vets envisage and does not need to cost the earth.  We can support much of the administrative burden, with no intervention from the veterinary practice, and at no extra cost.  The pension pain is controllable!

HMRC warns of Phishing Scam

HMRC have released another warning about ‘phishing scams’.  The current scam is centred around the subject of complaints, and contains a malware attachment.


This is the when fraudsters pretend to be somebody else in an attempt to gain access to personal information. Usually this is in the form of emails but can be in other ways such as social media posts. For more information see here.


This is malicious software that will attempt to be installed on your computer. Some malware could merely track your online activity but some could, for instance, gain your online bank details for criminals. There is a whole range of malware threats, and more can be seen here.

Self-Assessment Filing

The HMRC warning has been produced in the run up to the Self-Assessment Filing deadline. HMRC staff undertake mandatory training to identify potentially threatening emails, and they suggest individual business should look at their own systems and staff as well.

Tax Refunds

The email claiming to be notifying of a tax refund, with a link to click on, has been around for a while. Employees receiving a refund of tax, usually due to a tax code change, will generally receive this through the payroll, without any additional forms.

If an employee receives one of these emails they should forward it to the HMRC fraud department –

Employers can always contact us for more information on what to do if an employee believes they have the wrong tax code, and what the likely consequences are.

Payroll Fraud

Payroll Fraud is theft from a business via the payroll system.  The BBC recently published findings from the report by Jim Gee, former NHS anti-fraud boss.  The NHS is estimated to be suffering around £5.7bn in fraud per year, with around £555 million to £1.49bn attributed to payroll fraud.

This is out of a total budget of around £110bn, and so represents a significant healthcare cost.  The Department of Health does not apparently recognise the figures, but equally there was no official denial.  The NHS are already taking steps to tackle the fraud but the report’s authors accuse the Government of not doing enough.

What is Payroll Fraud?

Payroll fraud takes a variety of forms.  It can be an employer inventing fictitious employees and paying them through the payroll, as in the case of a recent pub landlord.  This is also known as ‘ghost’ employees and can be hard to detect, but does leave a fairly easy paper trail.

Falsifying timesheets can be more difficult, as this may involve a line manager.  A friend can ‘clock –in’ for a colleague, and employees can end up with hours of leave at the company expense, or a little extra is added to every shift.  Biometric time clocks can help avoid this, but also training and company culture can play a big part in reducing or eliminating this threat.

Pay rates can be altered, so an employee can receive a higher wage than agreed, but then covered up by reverting pay rates after pay day.  This requires collusion with a payroll clerk, but can be easily spotted by checking employee’s rates in the payroll reports.

Expense or allowance claims can also be falsified, this can be difficult to detect again, and relies heavily on supervision to detect and prevent fraudulent claims.

Can Payroll Options Help?

Outsourcing the payroll to Payroll Options helps tackle fraud by allowing an independent party to scrutinize the payroll.  Although not all types of fraud can be eliminated in this way, there will be an audit trail produced with every pay day.  The reports should also be scrutinised by a second member of staff to the person submitting the pre-payroll information.

Because the payroll data is brought together, send to a third party, processed and then returned, these are all demarcated steps at which the fraudulent activity could be detected.  If there is a suspicion then very easily there could be a team making initial investigations, rather than a single member of staff.

Fraud thrives when it is undetected, if the threat of detection is increased this will act as a deterrent and safe guard the business’s workforce.  Contact Payroll Options to find out more.

National Minimum Wage 1st October 2015

From Thursday 1st October 2015 the Minimum Wage rates are set to rise.  These rates apply to pay reference periods beginning on or after that date, and are increases on bands that are already in place.  The biggest rise, of just under 21%, is the apprentice rate.

From April 2016 things are set to change with the introduction of The National Living Wage, which applies to working people over the age of 25.  For those workers below the age of 25 the current National Minimum Wage will continue to apply, although the rates may change.

The National Living Wage should not be confused with the Living Wage, set independently by the Living Wage Foundation.  The Living Wage is calculated based upon the cost of living in the UK.  The National Living Wage, and National Minimum Wage, are set by the Government based upon recommendations from the Low Pay Commission.

National Minimum Wage 1st October 2015

£6.70 for Workers 21 and over
£5.30 for 18 – 20 year olds
£3.87 for 16 – 17 year olds
£3.30 apprentice rate

The Apprentice Rate is for apprentices under the age of 19, or 19 or over but in their first year.

The rates were first announced in March by the coalition government and more information can be found here.  There are some exemptions to the minimum wage, such as self-employed workers, and further details can be found here.



PAYE Late Filing Penalties

HMRC can apply penalties if filing of Real Time Information (RTI) is late. Initially this was only for larger companies but now applies to all employers regardless of the size of their workforce.  HMRC have now issued the first in year notices to employers with fewer than 50 employees.

Real Time Information

Real Time Information, or RTI, is the information that needs to be sent to HMRC for every pay day.  It is a legal requirement that RTI is submitted on or before the date that employees are paid, or due to be paid.  An RTI submission contains a lot of information, and has meant we no longer have to submit things like P45 or P14 forms.

Late Filing Penalties

HMRC are not automatically applying the fines, and will take a risk based approach with a proportionate response for more serious defaults. HMRC have said they do not want to apply the penalties, but do want the RTI files submitted on time.  It is possible to appeal, and if you receive a penalty notice, but were only a day late, you should follow the instructions on the HMRC website.

For 2015/16 the penalties are as follows:

Number of Employees Monthly Penalty
1 to 9 £100
10 – 49 £200
50 – 249 £300
250 or more £400

For up to date information, and further details of how to appeal, visit the HMRC website.

RTI submission is part of the service provided by Payroll Options, and as long as we have completed the payroll before the payday, the RTI submissions will be made on the correct date.

For more information about RTI filing and penalties see here

Robust Payroll Solution

Outsourcing your payroll function to Payroll Options can be a good measure to ensure you have a robust payroll solution in place.

Reliable and Predictable Performance

When a company is looking at their payroll requirements it is an obvious, but sometimes overlooked, requirement that the payroll should be produced in the same way every pay period, and be prepared accurately and on time.   For a truly robust payroll solution this is an essential component.

It is not enough to have a payroll produced around pay day, which may produce a completely different result depending on who has to do it this time, and the time they have away from their other duties.  Outsourcing the payroll can produce a reliable and predictable outcome.

By outsourcing the payroll you no longer have to worry about a key member of staff being off sick, or on leave near pay day.  Just preparing a timesheet, or list of changes, is a far more straightforward task than being asked to do the whole payroll.

Back-Up and Contingency

You need to maintain back-ups and have contingency plans against failure for many of your company’s processes.  Do you have similar for payroll?  The payroll must be completed on time, so how are you prepared if there is an interruption to your current processes?

Again, as part of a robust payroll solution, outsourcing can answer many of those questions.  Our back-ups, and contingency planning, are wholly aimed at keeping the payroll process running without interruption.  As long as you can get the information to us, we can process your payroll.

Complex Systems

We deliberately avoid complex spreadsheet requirements.  We believe that the more complex we make your job, the more likely we are to produce errors in the payroll.  We will therefore work with you to make your payroll duties as simple as we can, you are paying for us to take control of the complexity so that you don’t have to.

Outsourcing can again help provide a robust payroll solution as the responsibility for many of the complex steps are taking over by a specialist company.   These steps are likely to require additional knowledge that is probably outside your company’s day to day duties.

Find a Robust Payroll Solution by Outsourcing to Payroll Options

Minimise Payroll Risks

Minimise payroll risks by outsourcing your company payroll function to Payroll Options.  Outsourcing the company payroll has many benefits, some of which are sometimes overlooked:


At Payroll Options we have taken numerous steps to ensure accurate delivery of your payroll on time, every time.  Payroll has to be able to meet deadlines and here are some of the steps we have taken to make this happen:

  • Staff – one of our aims is that any member of staff can process any payroll. Although a company’s payroll is frequently managed by a small team, if that entire team were absent, with no notice, for any reason, another payroll team could take over.  The payroll would be processed in the usual way, the only difference being the names on the payroll report.
  • Technology – We cannot have our systems fail if we need to process payrolls, so we have taken steps to ensure that we minimise the risk of ‘system outage’. We use live parallel duplicate payroll systems, providing excellent system redundancy.

We also have incremental and offsite backups, and for a worst case scenario we keep a back-up disaster recovery site, that would enable a quick restore and back to operations in the case of a catastrophe.


Do you have time to keep up to date with the payroll legislative changes?  Mistakes can be costly, both in terms of possible HMRC fines and the time taken to rectify them.  Payroll only seems to become more complicated each year, and the advent of auto-enrolment pensions has added another layer of worry.  Allow Payroll Options to take on this burden and gain peace of mind.

We employ payroll qualified staff and specialise exclusively in payroll.  We keep our people, and systems, up to date so you don’t have to.


Fraudulent behaviour by employees is a very real problem, and employers should take steps to manage this risk.  Payroll fraud does happen and one possible, relatively simple, step that can be taken is to outsource the payroll function, and so divide the chain of the payroll process as well as an external source looking at the payroll.

The person producing the data, should ideally not be the person reviewing the payroll.  Payroll Options can send the payroll reports to nominated contacts, and so it is straightforward for a company to control the audit chain for payroll.

Outsourcing the payroll can be a practical step to minimise the risk of payroll fraud.

If you want more information on how Payroll Options can help your company minimise payroll risks, contact us today.