Business Support – Payroll fear in DTI plan

Payroll providers and business support advisers have expressed concern that the Small Business Service, announced in last month’s Budget, will conflict with their businesses.

Backed with #100m of government funds, the SBS will give small businesses advice on National Insurance and VAT issues. In addition, trade secretary Stephen Byers said it would provide a new automated payroll service for all new small and medium-sized businesses from next April.

The automated payroll service proposal came as a surprise to many specialists.

The Inland Revenue’s Leicester office had run a pilot payroll administration scheme last year, but plans to roll it out nationally this April were shelved as the Revenue did not have the resources to run it.

Yvette Lamidey, group payroll manager for WH Smith, suggested the minister’s words ‘belied their intention’.

The idea behind the Revenue pilot scheme, she said, ‘was to help companies with their first couple of payrolls and then to wean them off.’ Client companies would either be taught to do the payroll themselves, or pointed towards local chartered accountants or bureaux that could do it for them.

The government’s initiative had raised eyebrows when it was first raised in last month’s Budget. Speaking after chancellor Gordon Brown’s statement, Baker Tilly partner Teresa Graham characterised the SBS payroll function as ‘a bit odd’.

As a member of the government’s Better Regulation task force, she has lobbied the chancellor to provide broader human resources support to start-up businesses.

‘Payroll isn’t the problem,’ she said. ‘Small business need help through all the myriad bureaucracy of things – like the working time directive.’

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