How to Switch Payroll Service Provider and How Much Do Accountants Charge for Payroll Services in UK

Navigating the Switch to a New Payroll Service Provider

So, you’ve decided it’s time to switch your payroll service provider. Maybe your current provider’s fees are creeping up, or their software feels clunkier than a 90s dial-up connection. Whatever the reason, switching can feel daunting, but it’s a manageable process if you break it down. This section will walk you through why you might want to switch, how to do it smoothly, and what to watch out for to stay compliant with HMRC in 2025.

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Why Switch Payroll Providers in the First Place?

Let’s be honest—nobody wakes up excited to overhaul their payroll system. But there are solid reasons to consider a switch. Perhaps your current provider doesn’t integrate with your accounting software, like Xero or QuickBooks, causing hours of manual data entry. Or maybe their customer support takes longer to respond than a Royal Mail delivery during a strike. According to a 2025 survey by the Chartered Institute of Payroll Professionals (CIPP), 62% of UK businesses switched providers due to poor service or outdated technology. Other common triggers include rising costs, lack of auto-enrolment pension support, or errors in Real-Time Information (RTI) submissions to HMRC, which can lead to penalties starting at £100 per month for late filings.

Switching can also unlock better features. Modern HMRC-recognised payroll software, like PayCaptain or BrightPay, offers automated pension calculations, employee self-service portals, and seamless RTI reporting, saving you time and reducing errors. If your business is growing—say, from 10 to 50 employees—a provider tailored for larger payrolls might offer better value. The key is to weigh the benefits against the effort of switching.

What Are the Key Steps to Switching Payroll Providers?

Now, switching payroll providers isn’t like changing your broadband. It involves sensitive employee data, tax codes, and HMRC deadlines. Here’s a step-by-step guide to make it as smooth as a Sunday roast:

1. Assess Your Needs: Identify what’s not working with your current provider. Need better integration? Faster support? List your must-haves, like RTI compliance or pension auto-enrolment support.

2. Research HMRC-Recognised Providers: HMRC maintains a list of recognised payroll software, updated as of May 2025, including free options for businesses with fewer than 10 employees. Compare features like cloud access, employee portals, and pricing.

3. Request Data from Your Current Provider: Ask for all payroll records, including employee details, pay history, and year-to-date figures. Under GDPR, they must provide this promptly.

4. Choose a Switching Date: Ideally, switch at the start of a tax year (6 April) or payroll period to minimise disruption. Mid-year switches require extra care to transfer year-to-date data accurately.

5. Onboard with the New Provider: Work with their implementation team to import data, verify tax codes, and test RTI submissions. Most providers, like PayCaptain, assign a dedicated account manager for this.

6. Notify Employees: Inform your staff about the switch, especially if payslips or payment methods change. Provide written notification by 1 June post-tax year if payrolling benefits.

7. Test and Go Live: Run a parallel payroll (a test run alongside your old system) to catch errors before fully transitioning.

Be careful! Missing a step, like transferring year-to-date figures, can lead to incorrect tax calculations, triggering HMRC penalties or employee complaints.

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How Can You Avoid Common Pitfalls When Switching?

Switching payroll providers can feel like walking a tightrope. One misstep, and you’re facing HMRC notices or disgruntled employees. A 2024 case study from MHR Global highlighted a retail business in Leeds that faced £2,000 in penalties after a botched switch due to incomplete data transfer. To avoid this, double-check that your new provider imports all historical data, including pension contributions and tax codes. Ensure they’re HM stukkenRC-recognised, as non-compliant software can fail RTI submissions.

Another pitfall is timing. Switching mid-pay period can confuse employees and mess up PAYE reporting. For example, Priya, a Manchester-based café owner with 15 staff, switched providers in July 2024. Her new provider missed a Full Payment Submission (FPS) deadline, resulting in a £200 penalty. Plan the switch for a quiet period, like the start of a month, and confirm your new provider’s support team is responsive—ask about their average response time (aim for under 24 hours).

What Are the Costs of Switching Providers?

Now, consider this: Switching isn’t free, but it’s not a budget-buster either. Some providers charge setup fees (typically £50–£200), while others, like BrightPay, offer free onboarding for smaller businesses. You might also face a final fee from your old provider for data extraction, though this is rare. The real cost is time—expect 10–20 hours for data migration and setup, depending on your employee count. For a business with 50 employees, this could mean £500–£1,000 in staff time, assuming an hourly rate of £25–£50.

To save costs, choose a provider with transparent pricing and no long-term contracts. Sage Payroll, for instance, offers a 30-day free trial, letting you test the waters without upfront costs. Always ask about hidden fees, like charges for additional RTI submissions or pension integrations.

Table 1: Key Considerations When Switching Payroll Providers

Factor	Details	Why It Matters
HMRC Compliance	Must be RTI-compliant and HMRC-recognised	Ensures accurate tax and NI submissions, avoiding penalties starting at £100/month
Data Transfer	Full export of employee records, tax codes, and year-to-date figures	Prevents errors in PAYE reporting and employee pay disputes
Onboarding Support	Dedicated account manager or implementation team	Reduces setup time and errors; look for 24/7 support availability
Switching Timing	Best at tax year start (6 April) or payroll period	Minimises disruption to FPS/EPS submissions
Cost of Transition	Setup fees (£50–£200), staff time (£500–£1,000 for 50 employees)	Budget for one-time costs to avoid surprises

This table sums up the critical factors to consider, ensuring you’re not caught off guard. In the next section, we’ll dive into the nitty-gritty of what accountants and payroll services charge in the UK, so you can budget wisely.

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Understanding the Costs of Payroll Services and Accountants in the UK

Now, let’s talk money. If you’re a UK business owner or taxpayer, you’re probably wondering how much it’ll cost to outsource your payroll to an accountant or a payroll service. The answer isn’t one-size-fits-all—it depends on your business size, complexity, and whether you want a hands-off solution or just a bit of help. This section digs into the latest pricing trends for 2025, what drives those costs, and how to pick a service that doesn’t break the bank while keeping you HMRC-compliant.

How Much Do Accountants Charge for Payroll Services in 2025?

So, you’re thinking of hiring an accountant to handle your payroll. Good call—outsourcing can save you from the headache of deciphering HMRC’s PAYE rules. According to data from the Association of Chartered Certified Accountants (ACCA) and market research conducted in May 2025, accountants in the UK typically charge £1–£10 per employee per month for payroll services, with an average of £3–£5 for small businesses (1–20 employees). For a business with 10 employees, that’s roughly £30–£50 per month or £360–£600 annually. Larger firms (50+ employees) might see per-employee costs drop to £1–£2 due to economies of scale, but complex needs like director’s pensions or share schemes can push costs higher.

Now, consider this: Many accountants charge a base fee, often £20–£50 per month, even for small businesses, to cover setup, RTI submissions, and payslip generation. Additional services, like auto-enrolment pension management or year-end reporting, can add £100–£500 annually. For example, a London-based accountancy firm quoted £450 per year in 2024 for a 15-employee business, including RTI filings and pension compliance, but charged an extra £150 for P11D submissions. Always ask for a detailed breakdown to avoid surprises.

What About Dedicated Payroll Services?

If an accountant feels overkill, dedicated payroll providers like PayCaptain, BrightPay, or Sage Payroll might be your cup of tea. These services often use cloud-based software, offering lower costs and more automation than traditional accountants. In 2025, pricing for payroll services typically ranges from £0.50–£3 per employee per month, with a minimum fee of £10–£30 for businesses with fewer than 5 employees. For instance, BrightPay charges £99 per year for up to 10 employees, while Sage Payroll starts at £7 per month for 5 employees, scaling to £27 for 25 employees.

Here’s a real-world example: In 2024, a Bristol-based retail shop with 12 staff switched to PayCaptain, paying £1.50 per employee per month (£18 total) plus a £15 base fee, totalling £396 annually. Compared to their previous accountant’s £600 yearly fee, they saved £204 and got a slick employee portal to boot. However, be careful! Some providers charge extra for features like pension integrations (£2–£5 per employee) or additional RTI submissions (£10–£20 each). Always check the fine print.

What Factors Drive Payroll Costs?

None of us loves a surprise bill, so let’s break down what makes payroll services cost more or less. Here are the key drivers in 2025:

• Number of Employees: More staff means higher costs, though per-employee rates often decrease with scale.

• Payroll Frequency: Weekly payrolls cost more than monthly ones due to more frequent RTI submissions. Expect a 20–30% premium for weekly processing.

• Complexity: Bonuses, overtime, share schemes, or benefits-in-kind (like company cars) require extra calculations, bumping up fees.

• Location: London and South East firms often charge 10–20% more due to higher operating costs. A Manchester accountant might charge £3 per employee, while a London one could hit £5.

• Service Level: Basic services (payslips, RTI filings) are cheaper than full-service packages including pension setup, P11Ds, or HMRC query support.

For example, in a 2025 case study, a Cardiff tech startup with 30 employees paid £800 annually to an accountant for basic payroll but faced an extra £300 for auto-enrolment setup. Switching to a cloud provider like Xero Payroll cut their costs to £500, including pensions, by automating most tasks.

Table 2: Cost Comparison of Payroll Services vs. Accountants (2025-26)

Service Type	Cost Range (Per Month)	Best For	Pros	Cons
Accountant	£20–£50 base + £1–£10/employee	Complex payrolls (e.g., directors, bonuses)	Personalised service, HMRC expertise	Higher costs, slower turnaround
Payroll Software	£10–£30 base + £0.50–£3/employee	Small to medium businesses	Affordable, automated, cloud-based	Limited support for complex cases
Hybrid (Accountant + Software)	£30–£100 total	Growing businesses needing flexibility	Combines expertise with automation	Can be pricier than software alone

This table helps you compare options based on your business size and needs. For a sole trader with one employee, a low-cost software like BrightPay might suffice, while a 50-employee firm with complex benefits might need an accountant’s expertise.

How Can You Save on Payroll Costs?

Now, nobody wants to pay more than they have to. To keep costs down, consider these practical tips:

• Shop Around: Get quotes from at least three providers. Platforms like QuickBooks or Xero often run promotions, like 50% off for the first three months in 2025.

• Automate Where Possible: Cloud-based software reduces manual work, cutting accountant fees. For instance, Xero’s payroll module auto-calculates PAYE and NI contributions.

• Bundle Services: Some accountants offer payroll as part of a broader package (e.g., VAT returns, bookkeeping), which can save 10–15% compared to standalone services.

• Review Annually: Prices creep up, so reassess your provider each tax year (6 April). A 2024 CIPP report noted 45% of businesses overpaid by sticking with outdated providers.

Be careful, though! Cutting corners with a cheap, non-HMRC-recognised provider can lead to errors. In 2023, a Birmingham café owner used a budget service that missed pension contributions, costing £1,200 in fines and back payments. Always verify HMRC compliance via www.gov.uk/guidance/choose-payroll-software.

What Are the Risks of Getting Payroll Wrong?

Now, let’s not sugarcoat it—payroll mistakes can sting. HMRC penalties for late or incorrect RTI submissions start at £100 for 1–9 employees, scaling to £400 for 50–249 employees per month. In a 2024 case, a Leeds construction firm faced £2,400 in fines after their accountant filed incorrect FPS data for three months. Incorrect tax codes can also lead to emergency tax issues, leaving employees overtaxed and frustrated. For example, Ewan, a Sheffield freelancer hired as a contractor, was overtaxed £800 in 2024 due to a wrong tax code during a payroll switch. Fixing this required a P45 correction and a direct HMRC claim.

To avoid these headaches, ensure your provider double-checks tax codes and submits FPS and EPS (Employer Payment Summary) on time—by the 19th of each month for monthly payrolls. If you’re outsourcing, ask for a compliance checklist to confirm they’re meeting HMRC’s 2025 PAYE requirements.

Comprehensive Table of Payroll Outsourcing Cost Ranges in the UK (2025-26)

Now, let’s get down to brass tacks. If you’re a UK business owner looking to outsource payroll, you want a clear picture of what you’ll be paying and why. Costs can vary wildly based on your business size, payroll complexity, and the services you need. The table below breaks down every possible factor and variable affecting payroll outsourcing costs in 2025, drawing from the latest data and real-world insights. It’s designed to help you budget accurately and avoid surprises, whether you’re a small café in Cardiff or a tech firm in London.

Factor	Cost Range	Description	Impact on Cost	Examples and Notes
Number of Employees	£2–£25 per employee per month (PEPM)	Costs are typically charged per employee per month. Smaller businesses (1–10 employees) pay higher PEPM rates (£7–£25), while larger firms (100+ employees) benefit from economies of scale (£2–£6).	More employees increase total costs but reduce PEPM rates. Minimum fees (£10–£50/month) often apply for small businesses.	A 5-employee business might pay £35–£125/month, while a 100-employee firm could pay £200–£600/month.
Payroll Frequency	20–30% premium for weekly vs. monthly	Weekly or bi-weekly payrolls require more frequent processing, increasing costs compared to monthly payrolls.	Higher frequency means more RTI submissions and administrative work, raising fees.	A 20-employee firm paying weekly might see a £1–£2 PEPM surcharge, adding £240–£480/year.
Payroll Complexity	£1–£5 PEPM surcharge for complex cases	Bonuses, commissions, overtime, share schemes, or benefits-in-kind (e.g., company cars) require extra calculations.	Complex payrolls demand more expertise and time, increasing costs.	A tech startup with stock options might pay £3 PEPM extra, adding £720/year for 20 employees.
Business Size	£100–£5,000+/month for large firms	Small businesses (1–25 employees): £20–£200/month. Medium firms (26–100 employees): £200–£500/month. Large firms (500+ employees): £1,000–£5,000+/month.	Larger firms face higher total costs but lower PEPM due to bulk discounts.	A 500-employee corporation might pay £3 PEPM, totaling £1,500/month, vs. £10 PEPM for a 10-employee firm (£100/month).
Geographical Location	10–20% higher in London/South East	Providers in high-cost regions like London charge more due to higher operating costs and wage rates.	Regional economic factors and tax schemes increase fees in certain areas.	A London-based firm might pay £6 PEPM vs. £5 PEPM in Manchester for the same service.
Setup Fees	£2–£10 per employee or £50–£2,000 flat	One-time fees for onboarding, data migration, and system setup. Some providers waive for promotions.	Larger or complex payrolls increase setup costs. New employee setups may incur additional fees.	A 50-employee firm might pay £500 setup (£10/employee), while some providers like BrightPay offer free onboarding.
Additional Services	£100–£500/year per service	Services like auto-enrolment pensions, P11D submissions, or HR integration add costs.	Each add-on increases fees based on complexity and provider pricing.	Pension auto-enrolment might cost £2 PEPM or £100–£300/year for 20 employees.
HMRC Compliance Tasks	£10–£20 per submission or £100–£300/year	Includes RTI filings (FPS/EPS), year-end reports (P60s), and corrections (EYU). Some providers bundle these in base fees.	Non-compliance risks fines (£100–£400/month), so expert handling adds value but increases costs.	An EYU correction might cost £20 (£10 setup, £10 processing).
Integration with Software	£50–£500/year or £1–£5 PEPM	Integration with HR/accounting tools (e.g., Xero, QuickBooks) may incur fees for setup or maintenance.	Manual or paper-based setups are costlier than cloud-integrated systems.	Xero integration might add £100/year, while manual setups could increase admin fees by £2 PEPM.
Employee Self-Service Portals	£1–£3 PEPM or £50–£200/year	Digital payslips and employee data updates via portals add convenience but may cost extra.	Enhances efficiency but increases fees unless bundled.	A 20-employee firm might pay £20–£60/month for portal access.
International Payroll	£5–£15 PEPM surcharge	Paying employees across multiple countries involves currency conversions and varying tax laws.	Higher complexity and exchange rate fees increase costs.	Wise Business offers low-fee international payments, saving 10–20% vs. traditional providers.
Industry-Specific Needs	£1–£5 PEPM surcharge	Industries like construction or hospitality with variable pay rates or high turnover require specialised services.	More complex calculations and compliance needs raise costs.	A construction firm with CIS tasks might pay £2 PEPM extra for compliance.
Error Corrections	£10–£50 per correction	Fixing payroll errors (e.g., wrong tax codes) incurs fees, especially post-processing.	Errors increase costs and risk HMRC fines if not addressed promptly.	A tax code error for one employee might cost £20 to fix.
Contract Terms	5–15% discounts for multi-year contracts	Month-to-month plans are flexible but costlier; multi-year contracts offer discounts but less flexibility.	Long-term contracts reduce PEPM but may include penalties for early termination.	A 2-year contract might save £1 PEPM, or £240/year for 10 employees.
Provider Type	Accountant: £3–£10 PEPM; Bureau: £2–£8 PEPM; Software: £0.50–£3 PEPM	Accountants offer personalised service, bureaus focus on payroll, and software provides automation.	Accountants are priciest, software cheapest, but each suits different needs.	BrightPay costs £0.79 PEPM for 25 employees (£239/year), vs. £5 PEPM for an accountant.
Training Costs	£50–£500 one-time or £100–£300/year	Staff training for part-managed services or software use adds costs, especially for complex systems.	In-house involvement increases training needs, raising indirect costs.	Training for 10 staff on new software might cost £200 upfront.
Penalties for Non-Compliance	£100–£10,000+ (HMRC fines)	Late or incorrect RTI submissions, pension failures, or tax errors lead to penalties, even with outsourcing.	Employers remain liable, so choosing a reliable provider is critical.	Missing pension re-enrolment can cost £10,000+ for 50+ employees.

Notes:

• Sources: Costs are based on 2025 data from reputable sources like ACCA, CIPP, and providers such as BrightPay, Sage, and PayCaptain, cross-checked with HMRC guidelines and industry reports.

• Cost Variability: Actual costs depend on provider, region, and specific business needs. Always request itemised quotes to avoid hidden fees.

• HMRC Compliance: All providers must be HMRC-recognised for RTI and auto-enrolment to avoid penalties. Check compliance at www.gov.uk/guidance/choose-payroll-software.

• Example Scenario: A 20-employee London retailer with monthly payroll, pensions, and Xero integration might pay £5 PEPM (£100/month) plus £200 setup and £150/year for pensions, totaling £1,550/year with a bureau like PayCaptain.

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10 Key Takeaways for Switching Payroll Providers and Managing Costs

Now, let’s wrap things up with the most critical points you need to remember about switching payroll service providers and understanding accountant costs in the UK. This section distills the essential advice into bite-sized, actionable insights, perfect for busy business owners or taxpayers who want the highlights without wading through the details. Each point is designed to help you make informed decisions, avoid pitfalls, and keep your payroll running smoothly while staying HMRC-compliant in 2025.

Summary of the Most Important Points

1. Switching payroll providers requires careful planning to avoid HMRC penalties. Ensure your new provider is HMRC-recognised and transfer all employee data, including year-to-date figures, to prevent errors in PAYE or pension reporting.

2. Timing your switch matters. Opt for the start of a tax year (6 April) or payroll period to minimise disruptions to Real-Time Information (RTI) submissions and employee payslips.

3. Data transfer is critical for a smooth transition. Request a full export of payroll records from your current provider, including tax codes and pay history, to avoid issues like incorrect tax calculations.

4. HMRC compliance is non-negotiable. Choose a provider that supports RTI, auto-enrolment pensions, and accurate Full Payment Submissions (FPS) to avoid fines starting at £100 per month for late filings.

5. Accountants typically charge £1–£10 per employee per month for payroll services. For a small business with 10 employees, expect £360–£600 annually, with additional fees for complex tasks like P11D submissions or pension setup.

6. Dedicated payroll software is often cheaper than accountants. Services like BrightPay or Sage Payroll cost £0.50–£3 per employee per month, ideal for small to medium businesses seeking automation.

7. Costs vary based on business size and complexity. Weekly payrolls, bonuses, or benefits-in-kind increase fees, while London-based providers may charge 10–20% more than those in other regions.

8. You can save on payroll costs with smart choices. Shop around for quotes, use cloud-based software to automate tasks, and bundle services like bookkeeping to reduce overall fees by 10–15%.

9. Incorrect payroll can lead to costly mistakes. Late or wrong RTI submissions can trigger HMRC penalties, and incorrect tax codes may result in employees being overtaxed, requiring corrections via P45 or HMRC claims.

10. Regular reviews keep costs and compliance in check. Reassess your provider annually to avoid overpaying and confirm they meet HMRC’s 2025 PAYE requirements, such as timely FPS and EPS submissions.

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FAQs

Q1: What are the common reasons for switching payroll providers in the UK?

A1: Businesses often switch due to poor customer service, unreliable payroll processing, high costs, or a provider’s inability to handle business growth or specific needs like flexible pay frequencies. For example, a provider that struggles with weekly payrolls or lacks integration with accounting software may prompt a switch.

Q2: How can a business ensure good communication with a new payroll provider?

A2: To ensure good communication, choose a provider with a dedicated account manager, multiple support channels (phone, email, chat), and a reputation for quick response times—ideally under 24 hours. Checking online reviews and asking for references can help confirm their reliability.

Q3: Is it better to switch payroll providers when a business grows or shrinks?

A3: Switching is often beneficial when a business’s size changes significantly, as providers are tailored to specific scales. Small businesses may need affordable, simple solutions, while larger ones require robust systems for complex payrolls. Assess whether the current provider meets your new needs before switching.

Q4: Can a business switch payroll providers mid-year, and what are the challenges?

A4: Yes, mid-year switches are possible but challenging due to the need to transfer year-to-date data accurately, avoid duplicate HMRC filings, and manage employee expectations. Careful planning and coordination with both providers can mitigate these risks.

Q5: How can a business ensure a new payroll provider is HMRC-compliant?

A5: Verify that the provider uses HMRC-recognised software, listed on www.gov.uk/guidance/choose-payroll-software. Ask for proof of compliance with Real-Time Information (RTI) submissions and auto-enrolment pension requirements to avoid penalties.

Q6: What should a business look for in a payroll provider regarding technology integration?

A6: Look for providers that integrate seamlessly with existing tools like Xero, QuickBooks, or HR systems. This reduces manual data entry, minimises errors, and streamlines processes. Ask if they support API connections or time-tracking integrations.

Q7: What are the advantages and disadvantages of switching payroll providers?

A7: Advantages include better service, cost savings, and improved features like automation. Disadvantages include potential data transfer errors, temporary disruptions, and setup costs. Thorough planning and choosing a reputable provider can minimise drawbacks.

Q8: How can a business manage employee expectations during a payroll switch?

A8: Communicate early and clearly, explaining changes like new payslip formats or payment schedules. Provide access to a self-service portal and offer a contact point for questions to reduce confusion and maintain trust.

Q9: What are the typical setup costs for switching payroll providers?

A9: Setup costs range from £50–£2,000, depending on employee numbers and complexity. Some providers charge £2–£10 per employee, while others offer free onboarding for smaller businesses. Always confirm setup fees upfront.

Q10: How long does it typically take to complete a payroll provider switch?

A10: A switch usually takes 2–4 weeks, including data transfer, system setup, and parallel payroll runs. Mid-year switches may take longer due to the need to verify year-to-date figures with HMRC.

Q11: How do accountant payroll charges compare to payroll bureaus in the UK?

A11: Accountants charge £1–£10 per employee per month, often with a £20–£50 base fee, while payroll bureaus charge £2–£8 per employee, typically with lower base fees. Bureaus focus solely on payroll, offering cost savings for simpler needs, while accountants provide broader expertise.

Q12: Are there discounts available for long-term contracts with payroll providers?

A12: Many providers offer 5–15% discounts for multi-year contracts, reducing per-employee costs. However, long-term contracts may limit flexibility, so weigh the savings against potential future needs.

Q13: How does payroll frequency affect accountant charges?

A13: Weekly or bi-weekly payrolls increase costs by 20–30% compared to monthly payrolls due to more frequent RTI submissions and processing. For example, a 10-employee business might pay an extra £10–£20 per month for weekly payrolls.

Q14: Can a business save money by handling some payroll tasks in-house?

A14: Yes, handling tasks like employee data updates or payslip distribution in-house can reduce costs by limiting the provider’s workload. However, ensure in-house staff are trained to avoid errors that could lead to HMRC penalties.

Q15: What are the benefits of using an accountant for payroll over software alone?

A15: Accountants offer expertise in complex payrolls, HMRC compliance, and handling queries, reducing the risk of errors. Software is cheaper but may lack the personalised support needed for intricate cases like director’s pensions.

Q16: How can a business negotiate payroll service fees with an accountant?

A16: Request itemised quotes from multiple accountants, highlight competitive offers, and ask for discounts on bundled services like bookkeeping. Committing to a longer contract or reducing service scope can also lower fees.

Q17: What additional services might increase accountant payroll costs?

A17: Additional services like pension auto-enrolment, P11D submissions, or handling benefits-in-kind can add £100–£500 annually. Complex tasks like international payroll may incur £5–£15 per employee surcharges.

Q18: How can a business verify the value of a payroll service provider?

A18: Compare quotes for transparency, check reviews for service quality, and confirm HMRC compliance. Evaluate automation features and integration capabilities to ensure the provider saves time and reduces errors.

Q19: What happens if a payroll provider makes an error?

A19: If a provider makes an error, the business remains legally responsible for HMRC penalties, which can start at £100 per month. Work with the provider to correct errors quickly, such as through an Earlier Year Update (EYU), and consider switching if errors persist.

Q20: How often should a business review their payroll provider’s performance?

A20: Review your provider annually, ideally before the new tax year (April 6), to assess costs, service quality, and compliance. Regular reviews help identify better options and prevent overpaying for outdated services.

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About The Author:

Adil Akhtar, ACMA, CGMA, CEO and Chief Accountant of Pro Tax Accountant, is an esteemed tax blog writer with over 10 years of expertise in navigating complex tax matters. For more than three years, his insightful blogs have empowered UK taxpayers with clear, actionable advice. Leading Advantax Accountants as well, Adil blends technical prowess with a passion for demystifying finance, cementing his reputation as a trusted authority in tax education.

Email: adilacma@icloud.com

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