Everyone has seen PAYE on payslips; it’s the most widely-used system for paying income tax to HM Revenue & Customs (HMRC) in the UK and has been for years. Despite that, there are many problems frequently affecting the system, from human error to confusion surrounding expenses which occur without the use of payroll software.
What is PAYE?
PAYE is income tax which is deducted from your salary before you receive it. It’s called Pay As You Earn because the money is sent to HMRC by your employer ‘at source’ (i.e., before it reaches your account), It was introduced in 1944 to make collecting income tax from a rapidly-increasing number of workers easier and more efficient. The majority of taxpayers now pay using this system.
The alternative to the PAYE system of paying income tax is self-assessment. People who are self-employed, for example, complete their own tax return and pay tax once or twice a year.
Common PAYE problems
Payroll software like MiraclePay, specifically designed for Microsoft Dynamics NAV, offer various ways to avoid the problems detailed above (and others). For example, MiracleP11D makes paying tax on employee benefits easy by recording and reporting on employee expenses, while MiracleEdocs takes the hassle out of complicated accounting documents by creating electronic payslips, saving you time and money.
Used by hundreds of companies to make payroll easier, MiraclePay increases efficiency and productivity whilst also reducing the time spent manually calculating payroll and boosting accuracy, minimising the impact of human error.
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