Changing Payroll Providers - Why it Pays Not to Wait Until April
Whilst the temptation for many UK businesses is to make a ‘clean break’, and change payroll providers at the end of the tax year, there are huge benefits to making the change before then (not to mention the downsides of leaving it to the last minute).
The end of tax year can be a hectic, challenging time for those managing payroll. In amongst pulling together all of those P forms, paying your PAYE and NICs and submitting final EPS/FPS to HMRC, you’ve got potential legislation changes for the coming year to be aware of and factor into your calculations. Throw the prospect of changing payroll providers into the mix, and all that comes with it, and you’ve got the recipe for a tricky time on your hands!
Let’s dive into the reasons why it pays not to wait until the end of the tax year to make the switch. We’ll weigh up some of the best times to switch payroll providers to help ensure you can get all your ducks in a row ahead of April, and experience a smoother, less stressful year end.
April is the busiest time of year for UK payroll
You don’t need us to tell you that the end of one tax year and the start of another can be a hectic time for those managing payroll in the UK. Not only are there your usual monthly payroll tasks to work on in the run-up to the start of April, but you’ll no doubt be working through your compliance checklist to ensure everything is correctly completed, paid and submitted to HMRC.
Changing payroll providers, despite being a relatively smooth process (at least where PayFit is concerned), does take a degree of time and effort on the part of the team being onboarded. Designated admins will need to put aside time to get up to speed on using their new payroll software effectively, all employee details will need migrating into the new system and syncs / integrations with existing HR, finance and pension platforms will need activating.
So doing this during a quieter period rather than right at the end of the UK tax year will create a much calmer experience for you and your team.
Finally, it’s worth remembering that if changing providers in April, a ‘dummy’ (parallel) payroll run may be required in March (i.e.: one actual run on the current software, another test run on the new one). This means giving your new supplier all of your payroll data from the current tax year regardless, which is arguably more work than switching a few months earlier.
PayFit Top Tip
One thing that causes businesses to hold off on changing payroll providers is indeed time. But many people have assumptions around this based on the UK payroll management status quo. Reassuringly, the onboarding times quoted in the past (but with some other providers still) are indeed a thing of the past. Some even quote as long as 3-6 months(!), however with PayFit things are much faster and more straightforward.
It’s also the busiest time of year for your new provider!
Whilst any payroll software worth its salt will automate the most time consuming end of year tasks (thereby reducing the amount of assistance you’ll require from your providers), there are inevitably more requests for support flying around come April.
And with all the best intentions in the world, there’s the risk that something important could get held up as a result, delaying your onboarding process.
Here at PayFit however, we have an extensive and highly trained onboarding and customer care team to provide the same excellent level of support all year round.
Don't delay changing payroll providers - if it’s broken, fix it!
Speaking to many businesses who’ve been with PayFit for some time, the most common complaint we hear is ‘we wished we’d changed payroll providers sooner’. Some of those yet to make the switch tell us that they spend upwards of a week on payroll every month (with PayFit this is reduced by up to 80%). Delaying the process simply wastes more time.
Say, for example, you had a payroll software demo in December, and then put off the changeover until March. That’s potentially another 3 weeks of your or your team’s time (and all the stress that comes with it) needlessly taken up on payroll when you could be doing everything in a couple of hours instead with a new approach.
So what’s the best time to switch payroll providers in the UK?
Our advice to businesses is to switch payroll providers as soon as you get the budget and buy-in from senior leadership, so that you can start winning back your time and energy each month straight away. But as a general rule of thumb, we’d say the best time to switch payroll providers in the UK during the Summer months, when everybody has slightly less on their collective plates and the start of the new tax year (and all the legislative changes that come with it) isn’t too far behind you.
How PayFit facilitates a smooth transition…and kickstarts your new tax year
With almost 10,000 customers to our name, it’s fair to say that our onboarding team knows the ins and outs of successfully helping businesses switch their payroll provider to PayFit. You’ll be assigned a dedicated support specialist to ensure that you and your team get up and running in no time.
And payroll year end needn’t be as stressful a time with PayFit by your side. All new legislation changes are automatically applied to your account ahead of the new tax year, so there’s no need to mess around with applying new rates or chasing your provider to implement them for you correctly. Once that clock ticks over on the 6th of April, all new rates will be applied for all future pay cycles. This includes:
Increases to statutory parental pay rates
Increases to statutory sick rates
Any updates to NI thresholds
Updates to Class 1 and Class 1A NI rates
Adjustments to tax rates and thresholds for Scotland, Wales and the rest of the UK (rUK)
Amendments to student loan plan thresholds
Changes to non-cumulative tax codes
Applying P9 notices
The run-up to the end of tax year is a breeze with PayFit too, with final FPS and EPS created and submitted to HMRC automatically, and P60 forms automatically sent to all employees. And if you payroll benefits, PayFit automatically generates P11D(b) forms during your next payroll run. Once you’ve indicated that you’re happy with the benefits and expenses you’ve recorded, PayFit will ensure these are submitted to HMRC ahead of the July deadline.
See it for yourself by booking in a call with a member of our product team below.
- April is the busiest time of year for UK payroll
- It’s also the busiest time of year for your new provider!
- Don't delay changing payroll providers - if it’s broken, fix it!
- So what’s the best time to switch payroll providers in the UK?
- How PayFit facilitates a smooth transition…and kickstarts your new tax year