Payroll errors are surprisingly common, not just for small businesses, but also for the self-employed. As a contractor, it is your responsibility to fulfil your tax and National Insurance obligations. Understanding the latest legislation is an integral part of remaining compliant as well as submitting accurate information in regards to your accounts, particularly as your career grows and progresses. Independent payroll consultant and lecturer Kate Upcraft commented on the very subject of payroll mistakes in this blog post by the Chartered Institute of Personnel and Development (CIPD):
“When processes can’t keep up with growth, that is a common instance in which things slip. You have to underpin growth with robust processes. Otherwise, things can quickly escalate. Once people have got away with procedures that are a bit sloppy that can become the normal practice, which gets dangerous. Suddenly a business is growing and it needs policies that it didn’t before. For instance, someone decides to write an expenses policy but they don’t know enough about expenses to do it, so the policy is ignored or it doesn’t work properly.”
Payroll errors cost small businesses a fortune, so remaining compliant as a self-employed contractor is vital to avoiding the associated financial implications. We provide professional payroll products for contractors, and whilst our team is always on hand to deliver the latest guidance to clients, we thought we’d share some top tips for compliance as a contractor.
Refine your contract
Your contract sits at the centre of your arrangement with your own clients as well as your relationship with recruiters, agencies, and umbrella companies. The financial impact of IR35 can be avoided by fine-tuning your contract for better compliance. In addition to considering various factors, negotiating your contract in light of current market conditions is key as explained in this blog post from ContractorCalculator. Your contract can also be negotiated for better compliance with IR35 rules after the signing of an initial agreement.
Prioritise record keeping
How you keep records is a fundamental part of ensuring compliance. Paperwork, such as invoices and timesheets, are essential to how you operate and receive payment as a contractor. Whilst every client may have a different payment and timesheet system, having your own processes in place ensures a hassle-free and simple exchange.
If you are a limited company contractor, you may have to prepare your own timesheets. Whether you are charged with devising your own timesheets or not, ensuring timesheets, invoices and other payment documentation follow a clear, concise, and consistent system is vital, particularly when countering common issues that arise during the processing and payment phases.
Outsource your payroll provisions
Outsourcing your payroll provisions to a trusted partner, like us, is an excellent way to ensure the accuracy and compliance of your accounts. Our products in particular ensure ease for contractors, and even save time and money. Just some of the benefits of becoming a Shield Contract Services customer include: same day payment, weekly payslips, statutory holiday entitlements, pension provisions and personal accident cover. Full compliance with current legislation also comes as standard across our payroll solutions range. Our online portal makes managing payroll easy, whilst our experienced and dedicated team is available to answer any queries you may have.
Want to find the payroll product that is right for you? Use our handy online tool to discover your payroll solution, or contact us direct for details.