As a small business owner, you know that compliance is key to success. There are many moving parts to staying compliant, from keeping up with the taxes to making sure your payroll is in order. Ignoring or not keeping up with any moving part may land your business in legal or financial trouble with the government. To help you out, we’ve put together six tips to help you stay compliant in 2022 and beyond. Take a look.
Table of Contents
Keep Up With Payroll Tax Changes
The payroll taxes are always changing, and it’s important to stay on top of them. The last thing you want is to get behind and end up owing government agencies hefty fines.
Here are a few steps you can take to keep up with the payroll taxes:
- Use payroll software that will automatically update tax rates and withholdings.
- Have a certified public accountant (CPA) or payroll specialist review your payroll procedures quarterly.
- Outsource payroll to a payroll service UK provider who can handle the payroll taxes on your business’s behalf while you take care of other business growth tasks such as client meetings and devising online marketing strategies.
- If you’re looking to save yourself plenty of time, handling all by yourself can be a waste of time, so outsourcing payroll services may be your best bet.
Be Punctual With Tax Filings
The government has a payroll tax deposit schedule that you need to follow, and if you don’t make your payroll tax deposits on time, you may be subject to penalties.
To avoid charges, make sure you:
- File your payroll tax returns on time.
- Deposit payroll taxes when they’re due.
- Keep track of payroll tax deadlines and set up reminders, so you don’t forget to make a deposit.
- If you can’t pay the full amount of payroll taxes owed, contact the government agency to set up a payment plan.
- Look for online payroll services in UK to help you with tax filings.
Keep Accurate Records
Keeping accurate payroll records will help you stay compliant with the government and avoid any financial hassle with the agency. It will also make filing your payroll tax returns easier and responding to any payroll tax audits.
Understand Your Withholding Requirements
As an employer, you’re responsible for withholding taxes from your employees’ paychecks and remitting those taxes to the government. The amount you withhold depends on several factors, including the employees’:
- Employment form.
- Pay rate.
- Marital status.
- Number of withholding allowances claimed.
It’s important to understand the payroll tax withholding requirements so you can properly withhold taxes from your employees’ paychecks. If you don’t withhold the correct amount of taxes, you may be subject to penalties. You can use the government’s withholding calculator tool to help you determine the right amount of taxes to withhold from your employees’ paychecks.
Handle Tips Correctly
If your business accepts tips, there are special payroll tax rules you need to follow. For example, if an employee receives 16 GBP in tips per day, you must withhold 2.4 GBP in payroll taxes from their paycheck. You also need to report tips to the government. You can do this by filing the relevant forms.
Classify Your Employees Correctly
Employee classification affects how much payroll tax you need to withhold from their paychecks. There are two types of employees: exempt and nonexempt.
Exempt employees are not subject to overtime pay or minimum wage laws. Examples of exempt employees include executives, professionals, and administrators. Nonexempt employees are entitled to overtime pay and minimum wage laws.
Timely business finance audits and following the above tips will help your business stay compliant with the government policies and keep the legal troubles at bay. We are sure the above tips were helpful.