The Importance of Accurate Employee Information

The Importance of Accurate Employee Information

For many businesses payroll is often the largest expense.  With increasingly complex legislation and compliance enforcement, it is more important than ever to ensure all employee information held for payroll is accurate both to maintain employee confidence and meet compliance requirements.

Following the devolution of income tax, including the Welsh Rate of Income Tax and the Scottish Rate of Income Tax, HM Revenue & Customs (HMRC) uses employees’ home addresses to assign a tax code based on the country. If an employee moves between regions but their address is not updated, this may lead to an incorrect tax treatment, resulting in an over or underpayment of tax.

It is vital that employees’ dates of birth are correct as their ages determine the National Insurance Category used, whether they are eligible for Auto Enrolment pensions and ensuring that the correct National Minimum or Living Wage is used.  Some pension providers do not give tax relief on pension contributions without a valid National Insurance number.

Unless all information is present for a new starter, it may be difficult for HMRC to identify the individual and add the employment and income to their record. This can cause greater issues for the employee such as affecting their eligibility for Universal Credit or collecting too much tax at source.

Outsourcing your payroll is a solution to improve accuracy, ensure sensitive data is protected and prevent any potential penalties from HMRC or The Pensions Regulator for non-compliance.

Kilsby & Williams provide a full secure payroll bureau serviced by qualified professionals.  If you would like to discuss outsourcing your payroll contact our Payroll Team on 01633 810081 or email payroll@kilsbywilliams.com.