Do you operate a small business with fewer than ten (10) employees, and need software or help in calculating your employees payroll? If so, this guide to HMRC's Basic PAYE Tools is for you.
Free and paid-for payroll software provides functions that can produce reports for HMRC. It can also help UK employers save time with other payroll tasks.
HM Revenue and Customs provide a free Basic PAYE Tools (BPT) payroll software system for employers.
It allows you to calculate your employees' National Insurance contributions, record employee details, and perform several other functions.
You can use it as a stand alone program or alongside other payroll software that you may already be using. Hence, doing so would add extra functionality.
Note: The information on how to download HMRC's basic PAYE Tools (BPT) is also available in Welsh language (Cymraeg).
HMRC basic PAYE (Pay As You Earn) tools allow you to:
Like many other types of free payroll software available online, HMRC PAYE tools cannot produce payslips, P60s, and P45 forms.
To enable you to use the free payroll software, you must first register with HMRC as an employer and have a login for PAYE online.
The software is not compatible with CPU's that do not support SSE2 instruction set, such as:
You will need an Intel compatible CPU with at least a Pentium 4 chipset or newer to use the payroll software. The software will work with most new computers.
You can use PAYE tools on computers using the following operating systems:
If you need assistive software support, the following browsers are compatible:
BPT is no longer available on a CD version. So, to get the software, you can download the appropriate version based on the computer you use on the GOV.UK website.
The payroll software will check for updates by automatic process and then inform you when it needs updating. This usually occurs in the new tax year (e.g. when different rates come into force).
Note: If you are already using an earlier version, do not uninstall this software before updating it. In most cases, you will lose any previous payroll data input into the system.
Most employers will need some help to download and set up the new HMRC payroll software. If so, you can use the Basic PAYE Tools user guide found at GOV.UK.
If so, you will need software that allows you to report the information to HMRC. Modern payroll software can help you with a variety of tasks, including:
HMRC has tested both free and paid-for software to ensure it can report required PAYE information online and in real time (RTI).
It is important to consider the requirements that your business may have. You should check the various features different payroll software provides.
Based on your business and individual needs, when choosing the best payroll software, you should consider:
For smaller businesses (e.g. with less than 10 employees), HMRC has already tested and recognises the free payroll software listed below:
HM Revenue and Customs has tested and recognises a list of paid-for software suppliers and displays some of the features that they offer on the GOV.UK website.
It is important to check whether the new software will continue using the same employee payroll ID numbers. Some systems will not allow you to do this, which may result in duplicated records and an incorrect PAYE bill.
If your new software does not allow you to use the same employee ID numbers, you should insert 'Yes' in the Payroll ID changed indicator for each employee on your Full Payment Submission (FPS) to HMRC.
How to Download HMRC's Basic PAYE Tools