Whilst the announcement by the Chancellor, George Osborne, that he intends to investigate the merging of regulations for tax and national insurance (NI) is welcome, any likely improvements in this area will take some time come into effect. In the meantime with a new tax year upon us bringing with it a raft of regulation changes, accounting for payroll still takes up a sizeable amount of administration time.One of the quickest ways to create employee dissatisfaction is to incorrectly calculate their payroll and tax rates. Not only will this involve employees in potentially protracted correspondence with HMRC, a cumulative error could leave them with a sudden tax bill and no means of paying. Although there are a number of payroll calculation programmes available, some still require manual amendments when regulations change and even those with automated updates still require a measure of payroll knowledge to make sure that errors don’t creep in. Even the online payroll calculation software available from HMRC is not foolproof and in fact is generally not rated as among the better payroll programmes.Keeping up with HR and payroll issues can be a full time job. The recent spring pay alert issued to employers includes reminders that from now on employers with fewer than 50 employees have to send starter and leaver forms (P45s, P46s etc) online to HMRC. Add in the fact that annual returns have to be filed online or face a fine and good payroll software becomes vital for the business. Of course, payroll software costs money and the total cost of the software and employee time taken in calculating payroll can be a drain on a business.One answer is to hand over the administration of your payroll to your accountant or a specialist payroll bureau leaving you free to concentrate on building your business. Payroll specialists not only have IT systems which are geared up to tax and NI calculation, they keep up to date with legislation changes as a matter of course. Outsourcing payroll is not expensive, for example outsourcing to Solid Limited will cost just £20 per month for up to seven monthly paid employees.The other benefit of outsourcing is that along with the basic payroll you also hand over all the statutory returns that go with it. Late and incorrect returns will result in your being fined by HMRC and could also lead to your business facing a tax audit. Outsourcing specialists are geared up to making sure you submit your returns on time.In addition to current reporting requirements HMRC have recently announced that they are to go ahead with a real time information pilot starting in 2012 and with the aim of being rolled out to all employers by October 2013. This will involve on line reporting at the same time as employees are paid, potentially leading to 52 returns each year for weekly paid employees. Apart from basic reporting, those involved in payroll at present have to deal with end of financial reporting with HMRC deadlines for the end of the 2010/11 tax year as follows:· 19 April – Final PAYE and NI payments to reach your HMRC tax office with electronic payments to be cleared into the HMRC account by 21 April.· 19 May – Employer Annual Return – P35 & P14. These give details of pay and deductions for the year and are generally submitted on line. You do need to notify HMRC even if you have no P35 or P14 return to make.· 31 May – Each employee must be given a P60 which is a summary of earnings and deductions. For the first time this year as an alternative employers can give employees on line access to electronic P60s· 6 July – Expenses and benefits forms P11D, P9 have to be filed with HMRC and given to employees.