Compliance. The word stirs a wide range of emotions, particularly within the Umbrella Payroll Industry, the word has resulted in more than a few sleepless nights.
Take the recent surprise announcement that Off-payroll IR35 Reforms will be repealed from April 2023.
This article will consider some ways that your Umbrella Payroll Software can help or hinder your quest for compliance.
Before we begin, it’s important to point out that this article is in no way intended to provide legal advice. You should seek guidance from a legal professional for such matters.
Ok, let’s go.
10 Reasons why your Umbrella Payroll Software may be hurting your compliance
1) It doesn’t perform tax calculations correctly
It goes without saying that a fundamental part of compliance is calculating and processing the right amount of tax for a contractor. If your Umbrella Payroll Software isn't performing these calculations correctly it could hurt your efforts to be compliant.
2) It doesn’t use the latest HMRC figures
Performing tax calculations properly is only possible if your Umbrella Payroll Software uses the latest information from HMRC.
3) Fails to create and supply the right documentation to your workers
Depending on the type of agreement in place with your contractor certain documents (Payslips, Employment Contracts etc.) need to be supplied. To aid compliance this information should be accurate and supplied in a timely fashion.
4) It fails to store the right information for the right amount of time
Fulfilling your obligations to your contractors means storing personal data. But the length of time you hold onto that data, how you process it, under what circumstances you grant access to it, and when you delete it all have a bearing on compliance.
5) Doesn’t use Real Time Information
Since April 2014 all employers have been required to report in real time to HMRC. Extensive information for RTI in software development has been provided by HMRC.
6) Has difficulty exporting information into an easy-to-use format
Whether it's to provide some light bedtime reading or fulfill an official information request, there will be occasions when you need to export information. If your software can't export information in a readable, universal format it could end up hampering your efforts to be compliant.
7) Makes it difficult to maintain accurate data
Having the ability to access and maintain your contractor payroll data in one place can give you valuable insights into your compliance landscape. Your Umbrella Payroll Software should make it easy to do this.
8) Doesn’t contain checks to minimize human error
Mistakes. We all make them. At times a lack of compliance may not be a deliberate attempt at tax evasion, it could simply be human error. If your Umbrella Payroll Software doesn't contain measures to minimize human error a simple mistake could prove costly.
9) Uses outdated technology
Older software packages tend to become less secure and reliable over time as their developers stop supporting them. If your Umbrella Payroll Software only runs on Windows XP it might be time to consider an alternative.
10) It's Difficult to use
Remaining compliant is a worthwhile pursuit, though not always an easy one. If your Umbrella Payroll Software is complicated and difficult to operate you will likely spend significant amounts of time learning to use it and teaching your staff. Time that you could be devoting to other important areas, such as remaining compliant.
How to Make Sure Your Umbrella Payroll Software is Compliant
Compliance needn’t be a cause for apprehension. Conducting your business in compliance with HMRC guidelines is a sure way to gain a reputation as an honest, reputable, long-lasting organisation.
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