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HMRC internal manual

Money Laundering Regulations: Compliance

Accountancy Service Providers (ASPs): Tasks performed by a Payroll Agent

The services offered by a payroll agent are to calculate the Income Tax and National Insurance contributions due from the employees of a business and the net pay due to them. Businesses provide details of the hours worked by their staff and the rates of pay to enable the payroll agent to make the necessary calculations. The agent will see that PAYE is correctly operated and prepare payslips for the employees. Some agents may have authorisation to transfer funds direct from the client’s bank account and to make BACS transfers to the employees’ bank accounts.

There are software packages available that can be used to calculate Income Tax and National Insurance deductions and most agents make use of one.

Some agents will also be involved in the submission of end of year PAYE returns (P35s) and returns of benefits in kind received by directors/employees (P11D).